At a previous employer, Franck Latrémolière and Nicholas Francis led a series of studies for UK regulators and regulated companies on the use of productivity trend data to inform regulatory estimates of cost trends to be included in price controls.
The work took account of input price trends, capital substitution, and of the effects of differences in capital intensity. It also considered how the concept of a "privatisation effect" can be used to estimated future trends.
The work done for Ofwat was published:
Additional work on related issues was done in confidence for a group of companies in another regulated sector.
Since setting up Reckon, we have revisited some of this work, together with the work of other experts in this area, as part of a study jointly commissioned by the water industry in England and Wales and its regulator. This has led us to identify specific improvements and simplifications to our previous approaches.