Efficiency studies

We have knowledge and experience in all aspects of the quantitative analysis of operating efficiency issues, and in the setting of efficiency improvement assumptions or targets in the context of a price control review.

*Nicholas Francis

Reckon's staff have a track record of providing expert advice on the use of cross-industry comparisons and of total factor productivity measures to estimate the potential for general efficiency improvements in a sector, and on econometric and programming techniques to assess relative efficiency and to inform efficiency catch-up assumptions for individual companies.

We are familiar with all the main relevant techniques, their strengths and weaknesses, their applicability to the data available in particular industries, and the interactions between them.

In selecting an appropriate approach for each case, we combine our experience of what works in practice with a rigorous theoretical analysis of the nature, significance and direction of the potential biases which affect each candidate technique.

This recognises the inherent limitations of the information available on how performance improvements are made, and provides a robust basis for choosing between approaches (e.g. top-down or bottom-up analysis) and/or for combining their results to answer price control questions.

*Indexation of retail price controls for a water company (2013)

*UKWIR (2012) A total expenditure approach to cost assessment

*Productivity and unit cost analysis for the Office of Rail Regulation (2011)

*NMa Energiekamer (2010-2011) Trends in productivity growth and input prices

*Scope for efficiency study for Ofwat's 2009 price control review

*NMa Energiekamer (2008) Trends in productivity growth and input prices

*UKWIR time series panel data analysis (2007-2008)

*Ofgem productivity trends (2007)

*UKWIR/Ofwat efficiency methods (2006-2007)

*Work on productivity trends (2003-2004)

*Staff training on quantitative techniques

See also: Price controls

See also: Econometric analysis

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Reckon LLP is an economics consultancy with expertise in data analysis, economic regulation and competition law.