Incentive Regulation and the Role of Convexity in Benchmarking Electricity Distribution: Economists versus Engineers
AbstractThis note illustrates the potential impact of the specification of a convex production technology on establishing minimal costs compared to the use of a non-convex technology when benchmarking electricity distributors. This methodological reflection is mainly motivated by recent engineering literature providing evidence for non-convexities in electricity distribution. An empirical illustration using non-parametric specifications of technology illustrates this main point using a sample of Spanish electricity distribution firms earlier analysed in Grifell-Tatjé and Lovell (2003).
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Bibliographic InfoPaper provided by IESEG School of Management in its series Working Papers with number 2007-ECO-01.
Length: 16 pages
Date of creation: Oct 2007
Date of revision:
Publication status: Published in Annals of Public and Cooperative Economics, June 2008, 79(2), pp. 227-248
Convexity; incentive regulation; benchmarking; engineering;
Other versions of this item:
- Emili GRIFELL-TATJ� & Kristiaan KERSTENS, 2008. "Incentive Regulation And The Role Of Convexity In Benchmarking Electricity Distribution: Economists Versus Engineers," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 79(2), pages 227-248, 06.
- L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
- L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
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