Benchmarking-based incentives and regulatory applications

Abstract:

The purpose of this project is to investigate the theoretical foundation and practical applicability of incentive schemes based on state-of-the-art benchmarking methods. The methods identify best practices using frontier models estimated using Data Envelopment Aanalysis DEA and Stochastic Frontier Analysis SFA, and they provide multi-dimensional measures of performance relative to such frontiers.The applications include the use of such methods in the regulation of natural monopolies and organizations with market poser and with implications to key sectors of an economy: energy & water utilities, healthcare, education, etc.