MEASURING THE IMPACT OF PRICE CAPS ON PRODUCTIVE EFFICIENCY IN TELECOMMUNICATIONS IN THE UNITED STATES
Incentive regulation is now an important regulatory tool in the telecommunications industry in the United States. The issue explored here is whether incentive regulation has resulted in an increase in productive efficiency. After providing an overview of the nature of incentive regulation, the metho...
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Published in | The Engineering economist Vol. 46; no. 2; pp. 81 - 113 |
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Main Author | |
Format | Journal Article |
Language | English |
Published |
Norcross
Taylor & Francis Group
01.01.2001
Taylor & Francis Inc |
Subjects | |
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Abstract | Incentive regulation is now an important regulatory tool in the telecommunications industry in the United States. The issue explored here is whether incentive regulation has resulted in an increase in productive efficiency. After providing an overview of the nature of incentive regulation, the methodology for measuring the effects of incentive regulation on productive efficiency is reviewed. This methodology is data envelopment analysis and allows for the measurement of both scale efficiency and technical efficiency of individual local exchange carriers. The results indicate that most local exchange carriers (LEC) were technically efficient over the 1988-1998 period. Four LECs, however, consistently demonstrate scale inefficiency. Finally, in the aggregate, there is no identifiable improvement in aggregate LECs' technical efficiency between 1988 and 1998. |
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AbstractList | Incentive regulation is now an important regulatory tool in the telecommunications industry in the US. The issue explored here is whether incentive regulation has resulted in an increase in productive efficiency. After providing an overview of the nature of incentive regulation, the methodology for measuring the effects of incentive regulation on productive efficiency is reviewed. This methodology is data envelopment analysis and allows for the measurement of both scale efficiency and technical efficiency of individual local exchange carriers. The results indicate that most LECs were technically efficient over the 1988-1998 period. Four LECs, however, consistently demonstrate scale inefficiency. Finally, in the aggregate, there is no identifiable improvement in aggregate LECs' technical efficiency between 1988 and 1998. Incentive regulation is now an important regulatory tool in the telecommunications industry in the United States. The issue explored here is whether incentive regulation has resulted in an increase in productive efficiency. After providing an overview of the nature of incentive regulation, the methodology for measuring the effects of incentive regulation on productive efficiency is reviewed. This methodology is data envelopment analysis and allows for the measurement of both scale efficiency and technical efficiency of individual local exchange carriers. The results indicate that most local exchange carriers (LEC) were technically efficient over the 1988-1998 period. Four LECs, however, consistently demonstrate scale inefficiency. Finally, in the aggregate, there is no identifiable improvement in aggregate LECs' technical efficiency between 1988 and 1998. |
Author | URI, NOEL D. |
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CitedBy_id | crossref_primary_10_1016_j_ejor_2005_10_001 crossref_primary_10_1016_j_tele_2009_05_004 crossref_primary_10_1111_j_1467_629X_2006_00194_x crossref_primary_10_1111_j_1749_124X_2009_01169_x crossref_primary_10_1016_j_telpol_2009_04_002 crossref_primary_10_1108_14635770810876566 crossref_primary_10_1016_j_japwor_2010_11_001 crossref_primary_10_1111_j_1936_4490_2003_tb00706_x |
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SubjectTerms | Competition Competitive local exchange carriers Cost shifting Customer services Data envelopment analysis Earnings Efficiency Incentive plans Innovations Mathematical programming Prices Productivity Profitability Profits Regulation Studies Telecommunications industry |
Title | MEASURING THE IMPACT OF PRICE CAPS ON PRODUCTIVE EFFICIENCY IN TELECOMMUNICATIONS IN THE UNITED STATES |
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