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Local Electricity Distribution in Italy: Comparative Efficiency Analysis and Methodological Cross-Checking

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Author Info
Gian Carlo Scarsi (London Economics Ltd.)

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Abstract

This paper analyses technical efficiency of local electricity distribution in Italy (1994, 1996) by using both econometric (deterministic frontier, stochastic frontier) and linear programming (Data Envelopment Analysis) tools. Cross-sectional data were examined with respect to:(a) ENEL - the Italian electricity monopolist;(b) municipal authorities (MUNIs), i.e. town-based electric utilities which sometimes hold franchises for electricity distribution within city limits.Estimation results highlighted non-exhaustion of scale economies at sample-mean values. Pooled ENEL-MUNI analysis failed to spot any systematic superiority of ENEL's units over municipalities. One-to-one comparisons confirmed that the outcomes were mixed, with ENEL's local branches outperforming MUNIs in metropolitan and (sometimes) rural areas, and MUNIs faring better in medium-sized, Po Valley towns (Northern Italy). This suggests that a case-by-case approach should be adopted by Italy's regulatory and governmental authorities when dealing with the territorial reform of electricity distribution. Similarly, any ownership transfers and/or mergers involving ENEL's units and MUNIs should depend on the varied efficiency records which were detected according to different regional and economic scenarios.

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Paper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 1999.16.

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Handle: RePEc:fem:femwpa:1999.16

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Related research
Keywords: Electricity; Government Policy; Efficiency;

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Find related papers by JEL classification:
L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
L98 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Government Policy
L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Luciana Macedo, 2004. "Regulation, competition and ownership in electricity distribution companies: the effects on efficiency," City University Economics Discussion Papers 04/09, Department of Economics, City University, London. [Downloadable!]
  2. Murtough, Greg & Appels, David & Matysek, Anna & Lovell, C.A. Knox, 2001. "Greenhouse Gas Emissions and the Productivity Growth of Electricity Generators," Staff Research Papers 31917, Productivity Commission. [Downloadable!]
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