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Regulation and Measurement of the Productivity Offset

Author

Listed:
  • Uri, Noel D.

    (Common Carrier Bureau, Federal Communications Commission, Washington, DC)

Abstract

Calculation of the productivity offset or the X-factor used in setting price caps has a fundamental flaw when it is based on conventional growth accounting total factor productivity analysis. The problem is discussed in the context of incentive regulation used by the Federal Communications Commission in the United States and the appropriate correction is indicated. An example of the problem and its correction, using the access charge for interstate service in telecommunications, is provided. The correction shows that the appropriate X-factor is 9% greater than that based on conventional growth accounting total factor productivity analysis.

Suggested Citation

  • Uri, Noel D., 2001. "Regulation and Measurement of the Productivity Offset," Economic Analysis and Policy, Elsevier, vol. 31(2), pages 187-203, September.
    • Handle: RePEc:eee:ecanpo:v:31:y:2001:i:2:p:187-203
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    More about this item

    Keywords

    Accounting; Factor Productivity; Productivity; Regulation; Telecommunication;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L98 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Government Policy
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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