Price cap regulation and the ratchet effect: a generalized index approach

Abstract

Regulation, Technical change, Price cap, Ratchet effect, Incentives, D21, D24, L51, L95,

The impact of privatization approaches on the productivity growth of the water industry: A case study of Chile

“…The cases of England and Wales are paradigmatic, and several studies have assessed changes in the productivity of English and Welsh water companies (e.g. Saal et al, 2007;Bottaso and Conti, 2009;Portela et al, 2011;Maziotis et al, 2014). Because of the advantages of benchmarking, studies on the efficiency and growth in the productivity of water utilities have also been carried out in other countries, such as Portugal (Carvalho et al, 2012), Australia (Worthington, 2014), Spain (Sala-Garrido et al, 2012), Italy (Guerrini et al, 2013), and France (Lannier and Porcher, 2014), among others.…”

Accounting for service quality to customers in the efficiency of water companies: evidence from England and Wales

“…Most previous studies analysing the performance of the English and Welsh water sector have focused on the 10 WaSCs (Ashton, 2000;Saal & Parker, 2000, 2001Erbetta & Cave, 2007;Saal et al, 2007). The exceptions are Bottasso & Conti (2003), Saal & Parker (2006), Le Lannier (2011), andPortela et al (2011) who assessed the water supply service of both WoCs and WaSCs, and Bottasso & Conti (2009a, 2009b who evaluated the WoCs.…”

“…The importance of assessing the efficiency of the water industry is specially marked in England and Wales where it has come to be an important part of the process of determining the price of the water for urban uses (Cubbin, 2005). In this context, some empirical applications have mainly focused on analysing the impact of the privatization and regulation in productivity (or cost), price performance and/or profitability growth of the water industry (see, for instance, Ashton, 2000;Saal & Parker, 2000, 2001Thanassoulis, 2000;Bottasso & Conti, 2003, 2009a, 2009bErbetta & Cave, 2007;Saal et al, 2007;Maziotis et al, 2009Maziotis et al, , 2012Portela et al, 2011).…”

Economics

“…Renzetti and Dupont (2009) In a study in which the variable cost function on a group of English and Welsh water and sewerage companies, Bottasso and Conti (2009) evaluated the existence of a ratchet effect in cost cutting efforts related to a price cap regulatory regime. The authors found that cost cutting efforts increase during the early stages of a regulatory cycle and then weakens as price reviews approach.…”