Persistent and transient productive inefficiency in a regulated industry: electricity distribution in New Zealand

摘要

1. Important to recognize that productive efficiency of a firm can besplit in two parts: persistent and transient2. Application of incentive-based regulation schemes (e.g. pricecap that uses inefficiency scores in the definition of prices in theelectricity sector)2.1 If the regulator ignores/underestimates persistent efficiency,efficiency targets can be wrong. This may lead to qualitydistortion and lower quality compliance.