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Modelling Utility Financial Viability Using Logistic Regression: Evidence From Florida

Daniel Acheampong et al.

Accounting and Taxation2018article
ABDC C
Weight
0.26

What the paper says

Ratemaking is the mechanism that various state commissions use to establish utility rates for investorowned utilities. Using logistic regression, this study explains the need for a flexible model to determine the financial viability of such utilities. The study uses 47 Florida investor-owned water and wastewater utilities to assess financial viability from 2002 to 2013. The financial viability results obtained using the National Regulatory Research Institute (NRRI) model are compared to the results of a more rigorous logistics regression model developed in this study. First, the results show that the financial ratios currently used by the NRRI to determine the viability of utilities do not need to be all-inclusive. Second, using data from 2002 to 2013, the logistic regression model categorized the viability of these utilities into groupings different from those of the NRRI model. Third, the study shows that ratemaking is not a uniform process across all states and supports discontinuing usage of the NRRI standard viability model in favor of the logistic regression model that incorporates the same financial ratios used by the NRRI

Cite this paper

@article{daniel2018,
  title        = {{Modelling Utility Financial Viability Using Logistic Regression: Evidence From Florida}},
  author       = {Daniel Acheampong et al.},
  journal      = {Accounting and Taxation},
  year         = {2018},
}

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Modelling Utility Financial Viability Using Logistic Regression: Evidence From Florida

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Evidence weight

0.26

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.00 × 0.4 = 0.00
M · momentum0.20 × 0.15 = 0.03
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.