This is Part 2 in a series of booklets that aim to provide individuals working in the regulated aviation, communications, energy, rail and water sectors with an introductory guide to the principles and practices of economic regulation.
The focus of this booklet is price regulation. Specifically: how do regulators calculate the price controls?
- This Part explains that there is a standard and conceptually quite simple methodology that the UK regulators apply in most of the price reviews they carry out.
- It also outlines that different regulators have, over time, adapted the basic price-setting model in different ways, creating subtle but important differences in approaches between the sectors.