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Efficiency Measures and Regulation: An Illustration of the Gas Distribution Sector in Argentina


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  • Rodríguez Pardina, Martín

    (Universidad Argntina de la Empresa)

  • Rossi, Martín

    (Universidad Argntina de la Empresa)


The paper develops a cost frontier model of gas distribution and estimates it on data for gas distribution companies of Argentina. Efficiency measures are an important tool for regulators, showing how much a firm can rise its output without using more inputs. In Argentina, the Regulatory Framework of the gas sector establishes that only firms that are efficient can earn a rate of return similar to those activities that bear comparable risk. In this context, the estimate of efficiency measures is an indispensable tool to improve regulation of the privatised utilities. The first part of the paper consists in a theoretical survey of the existent literature where we discuss recent developments in this field, paying special attention to the case of regulated utilities. Deterministic and stochastic cost frontiers are analysed, both for the cases of cross-section and panel data. In the second part, we use econometrics methods to estimate a cost frontier (deterministic and stochastic) for the gas distribution sector in Argentina. Finally, the efficiency rankings of the companies are estimated.

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Bibliographic Info

Paper provided by Instituto de Economía, Universidad Argentina de la Empresa in its series UADE Working Papers with number 4_1999.

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Length: 22 pages
Date of creation: 01 Apr 1999
Date of revision:
Handle: RePEc:ris:uadewp:1999_004

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Keywords: Efficiency Measures; Gas Distribution Sector in Argentina;

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Cited by:
  1. Rossi, Martín, 2000. "Technical Change and Efficiency Measures: The Post-privatisation in the Gas Distribution Sector in Argentina," UADE Working Papers 7_2000, Instituto de Economía, Universidad Argentina de la Empresa.


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