Efficiency analysis and benchmarking

Comparative efficiency analysis and benchmarking are central to effective price regulation and have been used extensively by regulators to inform their decisions. Although the mathematical techniques can appear complex and obscure, benchmarking is simply a technique for comparing the value for money offered by different operators.

The tools we have developed, along with a well-established process for carrying out the benchmarking analysis in a regulatory context, have been applied across numerous benchmarking studies in the electricity and water sectors.

Frontier Economics in Australia has most recently undertaken total factor productivity studies for major metropolitan water sector firms and has also advised corporate clients and regulators on efficiency and benchmarking analysis in the electricity (transmission and distribution) sector.