Quality of service, efficiency, and scale in network industries : an analysis of European electricity distribution / Christian Growitsch ; Tooraj Jamasb ; Michael Pollitt
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Discovery
497374161
URN
urn:nbn:de:gbv:3:2-5250
DOI
ISBN
ISSN
Autorin / Autor
Beiträger
Körperschaft
Erschienen
Halle : Inst. für Wirtschaftsforschung, 2005
Umfang
Online-Ressource (Text, 342 KB)
Ausgabevermerk
Sprache
eng
Anmerkungen
Inhaltliche Zusammenfassung
Quality of service is of major economic significance in natural monopoly infrastructure industries and is increasingly addressed in regulatory schemes. However, this important aspect is generally not reflected in efficiency analysis of these industries. In this paper we present an efficiency analysis of electricity distribution networks using a sample of about 500 electricity distribution utilities from seven European countries. We apply the stochastic frontier analysis (SFA) method on multi-output translog input distance function models to estimate cost and scale efficiency with and without incorporating quality of service. We show that introducing the quality dimension into the analysis affects estimated efficiency significantly. In contrast to previous research, smaller utilities seem to indicate lower technical efficiency when incorporating quality. We also show that incorporating quality of service does not alter scale economy measures. Our results emphasise that quality of service should be an integrated part of efficiency analysis and incentive regulation regimes, as well as in the economic review of market concentration in regulated natural monopolies.
Schriftenreihe
IWH-Diskussionspapiere ; 2005,3 ppn:37244492X