Tracking the stepwise effects of regulatory reforms over time: a 'back-door' approach

Abstract

Most of the literature on the efficiency effects of regulatory reforms ignores the gradual nature of the implementation of these reforms. This article describes a new simple data manipulation that minimizes data requirements to measure econometrically the impact on efficiency of each stage of multi-stages regulatory reforms. The approach can easily be implemented using standard stochastic frontier software programs. It is illustrated with data on the Spanish port system, which went through a two-stage reform during the 1990s.