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Peruvian Electrical Distribution Firms’ Efficiency Revisited: A Two-Stage Data Envelopment Analysis

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  • Raúl Pérez-Reyes

    (Department of Economics, Universidad de Lima, Lima 15023, Peru)

  • Beatriz Tovar

    (Institute of Tourism and Sustainable Economic Development, Universidad de Las Palmas de Gran Canaria (ULPGC), 35017 Las Palmas de Gran Canaria, Spain)

Abstract

The extent to which the structural reform of the Peruvian electricity market in the 1990s has improved the technical efficiency levels of the distribution companies and whether some firm specific explanatory variables had influenced upon the efficiency was analysed for first time using a second stage Tobit model to study the influence of some firm specific explanatory variables on efficiency. Some authors have argued that the use of Tobit regression is inappropriate in the second stage of DEA and have suggested using other recently developed options. Due to this, it might be worth revisiting this issue and adding those other alternative models to check whether the conclusions obtained with the Tobit model could be upheld. The nine alternative models estimated allow us to confirm that the incentives generated by the reform process led to the firms becoming more efficient. Moreover, private management and the ratio of low voltage sales to medium voltage sales for each company positively affect efficiency, whereas investment per customer is negatively correlated to it.

Suggested Citation

  • Raúl Pérez-Reyes & Beatriz Tovar, 2021. "Peruvian Electrical Distribution Firms’ Efficiency Revisited: A Two-Stage Data Envelopment Analysis," Sustainability, MDPI, vol. 13(18), pages 1-20, September.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:18:p:10066-:d:631524
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