Earnings and Revenue Sharing Techniques

Core References

Resetting Price Controls for Privatized Utilities: A Manual for Regulators
Washington, D.C.: World Bank, 1999, Chapters 2 and 4.
Green, Richard, and Martin Rodriguez Pardina

Summarizes profit sharing regulation. Further discusses how regulators choose forms of incentive regulation in the context of a price review and provides an overview of the options.

Profit Sharing Regulation: An Economic Appraisal
Fiscal Studies, 17(2): 83-101, 1996.
Mayer, Colin and John Vickers

Examines profit sharing regulation. Considers regulatory instability, regulatory lag, incentive power, measurement problems, and using cash- flow or cost rather than profit measures of performance.

Designing Incentive Regulation for the Telecommunications Industry
Cambridge, MA: MIT Press, 1996, Chapters 1 and 3.
Sappington, David E.M., and Dennis L. Weisman

Defines and explains the basics of incentive regulation. Examines the features and economic effects of various forms of regulation, including rate of return regulation, earnings-sharing plans, revenue-sharing plans, and price cap regulation.

India Financing Highways
Other Infrastructure Study, report number 30363, World Bank, Washington, D.C., 2004.
World Bank

Report designed to provide information and advice to the Indian Union and States Governments on the principles and practicalities for establishing a sound and sustainable system of highway financing. Reviews the potential contribution of private sector finance to the sector and assesses the present use of private finance and the alternative possibilities for utilizing the private sector in the financing and management of the network.

Other References

Price Regulation
in Handbook of Telecommunications Economics, vol. 1, edited by Martin E. Cave, Sumit K. Majumdar, and Ingo Vogelsang. Amsterdam: North-Holland, 2002, pp. 227-293.
Sappington, David E.M.

Describes and gives examples of banded rate of return regulation, earnings sharing regulation, and revenue sharing regulation. Charts illustrate the sharing options and the incentive properties.

Key Words

Incentive regulation, Information, Earnings, Revenue Sharing