Regulatory authorities use different efficiency assessment methods to support the setting of efficiency increase targets for the regulated service providers. Session 2 describes the principles of this regulatory benchmarking. Within this session the various mathematical techniques to measure efficiency and their characteristics are presented:
· Uni-dimensional ratio analysis
· Statistical and econometric methods
· Linear programming methods
· Virtual network models
Furthermore, it is discussed why efficiency should be measured, what role efficiency assessment plays and how the efficiency results are applied and incorporated in the price control. The status quo of efficiency analysis in the EU is presented in a short synopsis.