According to my knowledge, which is sometimes limited, a handicap rating can be calculated by either two principles.
1. Observing actual performance and then creating a handicap
2. Measurements taken and formulas used to predict performance
This is according to an article by Jim Teeter : Yacht Racing Handicap System. These are two very different views. The first takes actual race results and base their handicap system on that. The second takes in account all the physical attributes of a boat (weight, length, sail area, etc)
These systems are then used to give boats the same equal opportunity of winning.
I have one big problem with both these systems, one major factor in boa speed is not taken in to account. The major factor being you, the sailor. Take
Tillerman, he sails a Laser and competes with people half his age. They are younger, more agile and more fit than him, but they have the same rating. On his blog he complains of not winning races, even though he sailed his hardest and best race. Is this fair?
Another example is when I started sailing, the yacht had a 0.95 rating and we were all beginner sailors. We always ended up in the end of the pack, dead last. Now, two years later the yacht is still on a 0.95 rating, but an experienced crew is sailing her. We take home the medals almost every week. Could that one factor make such a difference, I think so.
A skipper I once sailed under recommend that we don't give the system the boot, but adopt a golf handicap system. Still keeping the current rating, but bring the skipper and crew into the equation as well.
Basic golf handicap is calculated as follows, add your 10 best scores of 20 and then you can determine where you are on the handicap system. With each new game, you enter your result and your handicap get recalculated again. With this system you can still stay competitive even if you just started out.
By doing this beginners and seasoned sailors can race against each other competitively. Each regatta you can test your own ability and that of your boat.