Author
M.A in Economics
Abstract
It is argued that economic regulation of prices and conditions of public utilities improves efficiency and the quality of services. A Regulatory reform requires a regulatory body in place to set the rule of the game and to monitor the behavior of the firms engaged in the reform. The regulator's main task is to calculate the optimal prices and the level of cost-reducing effort for the firm and to instruct the firms to implement this solution. It is assumed that the result would furnish an environment in which competition will be flourished and accordingly efficiency and the quality of services will be improved. This study investigates regulatory reform in Iranian Electricity Distribution Industry (IEDI) and its impact on efficiency. To this end, efficiency in IEDI is estimated using DEA method and Malemquist index. Finally, price caps in EDI are calculated.
Keywords
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