Rewarding regulated firms based on their relative performance requires benchmarks that reflect how performance is affected by regulation. This paper demonstrates how parametric and nonparametric efficiency measures can be employed to produce benchmarks that account for the effects of regulation....

We estimate a regulated cost function to examine the contributions of technical change, scale economies, and regulatory bias to productivity growth in an eleven-year, twenty-firm panel of interstate natural gas pipeline companies. We derive the unregulated cost function from the regulated cost...