Economic Regulation

Economic Insights provides advice to regulators, regulated businesses and government agencies on all aspects of the economic regulation of infrastructure. We advise clients on:

  • Appropriate forms of regulation;
  • Incentive and productivity-based regulation;
  • Identification and quantification of efficiency gaps;
  • Regulatory parameters including the setting of X factors;
  • Asset valuation issues;
  • The cost of capital;
  • Cost allocation methods;
  • Pricing principles and tariff setting;
  • Design and implementation of auctions as a tool of regulation;
  • Regulatory public benefit tests.

Economic Insights specialises in the analysis and implementation of productivity-based regulation. Our team has extensive experience in the application of total factor productivity, cost functions and data envelopment analysis in price cap regulation.

We have extensive experience in advising clients on economic regulation of the energy, transport, telecommunications, postal and water industries. We have undertaken projects in Australia, New Zealand, Europe, North America, Asia and the Middle East.

Our team has expert witness experience and has been prominent in the design, implementation and analysis of regulatory arrangements. We also provide workshops to enhance the technical skills of utility and regulatory staff.

Performance Measurement

Economic Insights provides advice to firms, industry associations and government agencies on all aspects of performance measurement at the firm, sectoral and national levels. We advise clients on:

  • Identifying and measuring key outputs and outcomes for businesses;
  • How the outputs of service sector industries should be measured;
  • Firm productivity performance and how far it is from industry best practice;
  • Factors influencing productivity performance;
  • Sectoral and national performance comparisons across countries;
  • Constraints to improving productivity performance and what government can do to overcome them;
  • The impact of information and communications technology on productivity growth.

Competition Policy and Trade Practices

Economic Insights has extensive experience in advising private and public sector clients on a range of competition issues. We provide advice on:

  • Mergers and acquisitions;
  • Compliance with the Trade Practices Act;
  • Pricing and exclusionary conduct;
  • Estimates of damages from anti-competitive behaviour;
  • Public benefit tests;
  • Reviews of legislative restrictions on competition;
  • Structural reform;
  • Competitive neutrality;
  • Third party access to infrastructure facilities;
  • Quantitative analysis of firms and industries.

Our expertise has been applied to the analysis of competition issues in a wide range of industries, including agribusiness, airlines and airports, forestry, construction, electricity and gas, health, insurance, mining, seaports, telecommunications, petroleum, water, and wholesale and retail trade.

Infrastructure Assessments, Policy and Planning

Economic Insights provides advice to firms, industry associations and government agencies on all economic aspects of infrastructure policy, planning, investment, operation and regulation. We provide advice on:

  • Benefit-cost analysis of major infrastructure projects and non-infrastructure initiatives;
  • Strategic policy considerations for infrastructure use and management;
  • Financial investment analysis;
  • Economy-wide effects of infrastructure investment;
  • Public Private Partnerships;
  • Pricing, funding and taxation policy for infrastructure;
  • Development of methodologies and guidelines.

Benefit Cost Analysis and Economic Modelling

Economic Insights is highly qualified in cost benefit analysis and economic modelling. Our quantitative and modelling services include:

  • Econometric analysis to forecast and explain drivers of price and cost movements;
  • Benefit cost assessments of public policies and initiatives;
  • Computable General Equilibrium (CGE) modelling;
  • Models of firm behaviour in oligopoly, monopoly and competitive markets;
  • Performance measurement using Total Factor Productivity (TFP), Data Envelopment Analysis (DEA) and Stochastic Frontier techniques;
  • Estimation of damages.

Our consultants have assessed the economic impact and viability of public infrastructure projects, private projects and a wide range of government policies affecting various industries, including insurance, pharmaceuticals, health, agriculture, mining, water, energy, transport and telecommunications.

Reducing the Burden of Regulation

We have experience in the design and implementation of strategies, processes and tools for reducing the burden of regulation. This includes:

  • The preparation and review of regulatory impact statements covering economic, social and environmental effects;
  • The preparation of guidelines for improving and streamlining regulation;
  • The development of targets to measure progress in reducing the burden of regulation.

Economic Development Policy

Economic Insights has expertise and extensive experience in international economics and economic development. In the developing world, we have advised the Asian Development Bank, Australian Agency for International Development, the World Bank and private clients on:

  • Economic reform programs;
  • Development strategies;
  • Monetary, fiscal and exchange rate policies;
  • Private sector development;
  • Governance and institutional design;
  • Regulation and competition policies;
  • Trade policy;
  • Tax policy;
  • Corporatization, privatization and PPPs;
  • Natural resource management.

We have undertaken economic development policy assignments in Papua New Guinea, Africa and most Pacific Island countries.

Public Policy

Economic Insights has a strong background in the formulation and implementation of a wide range of public policies. Our team is able to undertake detailed and comprehensive benefit-cost assessments of most public policies. Key areas of expertise include:

  • Competition and economic regulation policies;
  • Trade policy;
  • Tax policy;
  • Infrastructure policy;
  • Environmental policy;
  • Reform of public enterprises;
  • Public Private Partnerships;
  • Microeconomic reform;
  • Macroeconomic policies.
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