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Cost efficiency in the Swiss gas distribution sector


  • Farsi, Mehdi
  • Filippini, Massimo
  • Kuenzle, Michael


This paper studies the cost structure of gas distribution utilities in Switzerland. Three stochastic frontier models are applied to a panel of 26 companies operating from 1996 to 2000. Efficiency is assumed to be constant over time. The analysis highlights the importance of output characteristics such as customer density and network size. The results suggest that the utilities could slightly reduce their operating costs by improving efficiency. There is no evidence of significant unexploited scale economies. However, our analysis indicates that the estimates of scale economies could be sensitive to the assumptions regarding the variation of output with output characteristics.
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  • Farsi, Mehdi & Filippini, Massimo & Kuenzle, Michael, 2007. "Cost efficiency in the Swiss gas distribution sector," Energy Economics, Elsevier, vol. 29(1), pages 64-78, January.
  • Handle: RePEc:eee:eneeco:v:29:y:2007:i:1:p:64-78

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    Cited by:

    1. Assaf, A. George & Barros, Carlos Pestana & Managi, Shunsuke, 2011. "Cost efficiency of Japanese steam power generation companies: A Bayesian comparison of random and fixed frontier models," Applied Energy, Elsevier, vol. 88(4), pages 1441-1446, April.
    2. Kopsakangas-Savolainen, Maria & Svento, Rauli, 2011. "Observed and unobserved heterogeneity in stochastic frontier models: An application to the electricity distribution industry," Energy Economics, Elsevier, vol. 33(2), pages 304-310, March.
    3. Makridou, Georgia & Andriosopoulos, Kostas & Doumpos, Michael & Zopounidis, Constantin, 2016. "Measuring the efficiency of energy-intensive industries across European countries," Energy Policy, Elsevier, vol. 88(C), pages 573-583.
    4. Kopsakangas-Savolainen, Maria & Svento, Rauli, 2008. "Estimation of cost-effectiveness of the Finnish electricity distribution utilities," Energy Economics, Elsevier, vol. 30(2), pages 212-229, March.
    5. Gugler, Klaus & Liebensteiner, Mario, 2016. "Productivity Growth and the General X-factor in Austria´s Gas Distribution," Department of Economics Working Paper Series 5221, WU Vienna University of Economics and Business.
    6. repec:cuf:journl:y:2017:v:18:i:1:valles-gimenez is not listed on IDEAS
    7. Goncharuk, Anatoliy G. & Storto, Corrado lo, 2017. "Challenges and policy implications of gas reform in Italy and Ukraine: Evidence from a benchmarking analysis," Energy Policy, Elsevier, vol. 101(C), pages 456-466.
    8. Alaeifar, Mozhgan & Farsi, Mehdi & Filippini, Massimo, 2014. "Scale economies and optimal size in the Swiss gas distribution sector," Energy Policy, Elsevier, vol. 65(C), pages 86-93.
    9. Anatoliy G. Goncharuk, 2013. "About The Influence Of High Gas Price On An Efficiency," Journal of Applied Management and Investments, Department of Business Administration and Corporate Security, International Humanitarian University, vol. 2(1), pages 58-67.
    10. Li, Hong-Zhou & Kopsakangas-Savolainen, Maria & Xiao, Xing-Zhi & Tian, Zhen-Zhen & Yang, Xiao-Yuan & Wang, Jian-Lin, 2016. "Cost efficiency of electric grid utilities in China: A comparison of estimates from SFA–MLE, SFA–Bayes and StoNED–CNLS," Energy Economics, Elsevier, vol. 55(C), pages 272-283.
    11. repec:eee:enepol:v:108:y:2017:i:c:p:606-616 is not listed on IDEAS
    12. Kenta Tanaka and Shunsuke Managi, 2013. "Measuring Productivity Gains from Deregulation of the Japanese Urban Gas Industry," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4).
    13. Vallés-Giménez, Jaime & Zárate-Marco, Anabel, 2017. "Fungibility and bandwagon effects of capital transfers in a federal context," Economics Discussion Papers 2017-46, Kiel Institute for the World Economy (IfW).
    14. Li, Hong-Zhou & Tian, Xian-Liang & Zou, Tao, 2015. "Impact analysis of coal-electricity pricing linkage scheme in China based on stochastic frontier cost function," Applied Energy, Elsevier, vol. 151(C), pages 296-305.
    15. Farsi, Mehdi & Filippini, Massimo, 2009. "An analysis of cost efficiency in Swiss multi-utilities," Energy Economics, Elsevier, vol. 31(2), pages 306-315, March.
    16. Ipatova, Irina & Peresetsky, Аnatoly, 2013. "Technical efficiency of Russian plastic and rubber production firms," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 32(4), pages 71-92.

    More about this item

    JEL classification:

    • L95 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Gas Utilities; Pipelines; Water Utilities
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance


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