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Type | Working Paper |
Scope | Discipline-based scholarship |
Title | The Estimation of an Average Cost Frontier to Calculate Benchmark Tariffs for Electricity Distribution |
Organization Unit | |
Authors |
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Language |
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Institution | University of Zurich |
Series Name | Working paper series / Socioeconomic Institute |
Number | No. 9803 |
Date | 1998 |
Abstract Text | In this paper we have examined the scale and cost inefficiency of a sample of Swiss electricity distribution utilities. To do so, we have considered estimation of a stochastic frontier average cost model using the approach suggested by Schmidt and Sickles (1984) for panel data. A translog cost function was estimated using panel data for a sample of 30 municipal utilities over the period 1992-1996. The results indicate the existence of economies of output and customer density and economies of scale. Moreover, the findings on cost inefficiency show that a majority of the distribution utilities is not producing at the minimum level of the cost and that a possible application of the frontier methodology employed in this paper relates to the regulation and benchmarking of the delivery rates. |
Official URL | http://www.econ.uzh.ch/wp.html |
PDF File | Download from ZORA |
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