Economic analysis can clarify even the most intractable issues, to inform better decisions. Here we bring the best that economics has to offer without bias: setting out what is and isn’t known, and what needs to be considered when there is no consensus.

Kadambari Prasad


Kadambari Prasad | Vice President

In The Analysis, we consider the complex challenges that businesses and policymakers face, and demonstrate the light that economic analysis can shed on them – albeit partially – to inform better decisions and advance important debates.

In this edition, our economists illustrate how economic theory helps analyse complex situations and trade-offs. They show how: the relationship between energy prices and consumption affects the effectiveness and affordability of support for energy bills; the relationship between royalties and the benefits standardised technology provide affects the incentives to develop and implement value adding technology; and the relationship between ownership and control affects incentives to increase prices after a partial acquisition.


Rigorous analysis can establish the facts: revealing what is true and what is false.

However, analysis rarely removes all ambiguity. It can pose new questions and leave others unanswered. Sometimes ambiguity may be inescapable; in which case, decisions should reflect that. Other times, further discussion and study will clarify matters. We believe that ambiguity requires more thought and analysis, not less.

In The Analysis, we aim to describe the facts on which we should agree and also set out the issues on which reasonable people disagree. As such, the views expressed here are the authors’ only and do not necessarily represent the views of Compass Lexecon, its management, its employees, or its clients. The authors will also state if third parties provided financial support for the analysis described.