Estimation of the X-Factor in CPI-X Regulation of the Western Australia Rail Industry
The X-factor in Consumer Price Index (CPI)-X or price-cap regulation performs two key roles. Firstly, it ensures that, while inflation does not result in erosion in the real prices regulated firms are permitted to charge, they do not unduly benefit by being able to appropriate all of the returns fr...
| Main Authors: | , , |
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| Format: | Journal Article |
| Published: |
Ohio State University
2005
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| Online Access: | http://hdl.handle.net/20.500.11937/7688 |
| _version_ | 1848745441723678720 |
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| author | Bloch, Harry Kenyon, Peter Wills-Johnson, Nick |
| author_facet | Bloch, Harry Kenyon, Peter Wills-Johnson, Nick |
| author_sort | Bloch, Harry |
| building | Curtin Institutional Repository |
| collection | Online Access |
| description | The X-factor in Consumer Price Index (CPI)-X or price-cap regulation performs two key roles. Firstly, it ensures that, while inflation does not result in erosion in the real prices regulated firms are permitted to charge, they do not unduly benefit by being able to appropriate all of the returns from productivity improvements, which would be passed on to consumers through lower prices in the case of a competitive industry. Secondly, the X-factor provides incentives for the regulated firm to engage in cost-reducing productivity improvements in the future. This is achieved by developing an appropriate benchmark, rewarding the firm when the benchmark is exceeded, and penalising the firm when it is not. The development of such a benchmark is the topic of this paper. |
| first_indexed | 2025-11-14T06:17:25Z |
| format | Journal Article |
| id | curtin-20.500.11937-7688 |
| institution | Curtin University Malaysia |
| institution_category | Local University |
| last_indexed | 2025-11-14T06:17:25Z |
| publishDate | 2005 |
| publisher | Ohio State University |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | curtin-20.500.11937-76882017-01-30T11:01:50Z Estimation of the X-Factor in CPI-X Regulation of the Western Australia Rail Industry Bloch, Harry Kenyon, Peter Wills-Johnson, Nick The X-factor in Consumer Price Index (CPI)-X or price-cap regulation performs two key roles. Firstly, it ensures that, while inflation does not result in erosion in the real prices regulated firms are permitted to charge, they do not unduly benefit by being able to appropriate all of the returns from productivity improvements, which would be passed on to consumers through lower prices in the case of a competitive industry. Secondly, the X-factor provides incentives for the regulated firm to engage in cost-reducing productivity improvements in the future. This is achieved by developing an appropriate benchmark, rewarding the firm when the benchmark is exceeded, and penalising the firm when it is not. The development of such a benchmark is the topic of this paper. 2005 Journal Article http://hdl.handle.net/20.500.11937/7688 Ohio State University restricted |
| spellingShingle | Bloch, Harry Kenyon, Peter Wills-Johnson, Nick Estimation of the X-Factor in CPI-X Regulation of the Western Australia Rail Industry |
| title | Estimation of the X-Factor in CPI-X Regulation of the Western Australia Rail Industry |
| title_full | Estimation of the X-Factor in CPI-X Regulation of the Western Australia Rail Industry |
| title_fullStr | Estimation of the X-Factor in CPI-X Regulation of the Western Australia Rail Industry |
| title_full_unstemmed | Estimation of the X-Factor in CPI-X Regulation of the Western Australia Rail Industry |
| title_short | Estimation of the X-Factor in CPI-X Regulation of the Western Australia Rail Industry |
| title_sort | estimation of the x-factor in cpi-x regulation of the western australia rail industry |
| url | http://hdl.handle.net/20.500.11937/7688 |