The main aim of this paper is to develop an econometric approach to the estimation of marginal costs of improving quality of service. Estimating marginal costs of quality can help energy regulators to design more effective incentive mechanisms for network utilities to achieve optimal quality...

The electricity industry in most developed countries has been restructured over recent decades with the aim of improving both service quality and firms’ performance. Regulated segments (e.g. transmission) still provide the infrastructure for the competitive segments and represent a notable...