Abstract
We undertake an analysis of regulatory consistency using a database of publicly available regulatory decisions in Australia. We propose a simple exploratory model which allows us to test for regulatory consistency across jurisdictions and industries without detailed knowledge of the regulatory process. We compare two measures using our approach-the weighted average cost of capital (WACC) and the proportion of firms' revenue requirement claims disallowed by the regulator. Our comparison suggests that the WACC is a very poor measure of regulatory consistency. Moreover, our empirical results may be interpreted as indicating that a range of measures ought to be considered when assessing regulatory consistency. Our results also provide an empirical foundation for theoretical modeling of regulatory processes.
Original language | English |
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Pages (from-to) | 60-74 |
Number of pages | 15 |
Journal | Contemporary Economic Policy |
Volume | 30 |
Issue number | 1 |
DOIs | |
Publication status | Published - Jan 2012 |