IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v62y2013icp419-430.html
   My bibliography  Save this article

Divergence in technical efficiency of electric utilities: Evidence from the SAPP

Author

Listed:
  • Jaunky, Vishal Chandr

Abstract

This paper investigates the convergence pattern of technical efficiency of the South Africa Power Pool (SAPP) utilities over the period April 2003–March 2010 by means of parametric and non-parametric techniques. Technical efficiency scores are computed via both stochastic frontier analysis and data envelopment analysis. Mixed results are obtained from the neoclassical convergence approaches. In addition, distribution dynamics methods reveal some evidence of club-formation and this result is supported with the occurrence of γ-divergence. Taken as a whole, technical efficiency is found to diverge among the utilities operating in the power pool.

Suggested Citation

  • Jaunky, Vishal Chandr, 2013. "Divergence in technical efficiency of electric utilities: Evidence from the SAPP," Energy Policy, Elsevier, vol. 62(C), pages 419-430.
  • Handle: RePEc:eee:enepol:v:62:y:2013:i:c:p:419-430
    DOI: 10.1016/j.enpol.2013.07.113
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301421513007714
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Andrew B. Bernard & Steven N. Durlauf, 1991. "Convergence of International Output Movements," NBER Working Papers 3717, National Bureau of Economic Research, Inc.
    2. Docquier, Frédéric & Lodigiani, Elisabetta & Rapoport, Hillel & Schiff, Maurice, 2016. "Emigration and democracy," Journal of Development Economics, Elsevier, vol. 120(C), pages 209-223.
    3. Hansen, Lars Peter, 1982. "Large Sample Properties of Generalized Method of Moments Estimators," Econometrica, Econometric Society, vol. 50(4), pages 1029-1054, July.
    4. Docquier, Frédéric & Lodigiani, Elisabetta & Rapoport, Hillel & Schiff, Maurice, 2016. "Emigration and democracy," Journal of Development Economics, Elsevier, vol. 120(C), pages 209-223.
    5. Christian von Hirschhausen & Astrid Cullmann & Andreas Kappeler, 2006. "Efficiency analysis of German electricity distribution utilities - non-parametric and parametric tests," Applied Economics, Taylor & Francis Journals, vol. 38(21), pages 2553-2566.
    6. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
    7. Estache, Antonio & Tovar, Beatriz & Trujillo, Lourdes, 2008. "How efficient are African electricity companies? Evidence from the Southern African countries," Energy Policy, Elsevier, vol. 36(6), pages 1969-1979, June.
    8. Bianchi, Marco, 1997. "Testing for Convergence: Evidence from Non-parametric Multimodality Tests," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 12(4), pages 393-409, July-Aug..
    9. David Roodman, 2009. "How to do xtabond2: An introduction to difference and system GMM in Stata," Stata Journal, StataCorp LP, vol. 9(1), pages 86-136, March.
    10. Docquier, Frédéric & Lodigiani, Elisabetta & Rapoport, Hillel & Schiff, Maurice, 2016. "Emigration and democracy," Journal of Development Economics, Elsevier, vol. 120(C), pages 209-223.
    11. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 407-443.
    12. Battese, George E. & Coelli, Tim J., 1988. "Prediction of firm-level technical efficiencies with a generalized frontier production function and panel data," Journal of Econometrics, Elsevier, vol. 38(3), pages 387-399, July.
    13. Sabyasachi Kar & Debajit Jha & Alpana Kateja, 2011. "Club-convergence and polarization of states: A nonparametric analysis of post-reform India," Indian Growth and Development Review, Emerald Group Publishing, vol. 4(1), pages 53-72, April.
    14. Phu Nguyen Van, 2005. "Distribution Dynamics of CO 2 Emissions," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 32(4), pages 495-508, December.
    15. Antonio Estache & MartÌn A. Rossi & Christian A. Ruzzier, 2004. "The Case for International Coordination of Electricity Regulation: Evidence from the Measurement of Efficiency in South America," Journal of Regulatory Economics, Springer, vol. 25(3), pages 271-295, May.
    16. Liddle, Brantley, 2009. "Electricity intensity convergence in IEA/OECD countries: Aggregate and sectoral analysis," Energy Policy, Elsevier, vol. 37(4), pages 1470-1478, April.
    17. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    18. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 107(2), pages 407-437.
    19. Filippini, Massimo & Hrovatin, Nevenka & Zoric, Jelena, 2004. "Efficiency and regulation of the Slovenian electricity distribution companies," Energy Policy, Elsevier, vol. 32(3), pages 335-344, February.
    20. T. W. Swan, 1956. "ECONOMIC GROWTH and CAPITAL ACCUMULATION," The Economic Record, The Economic Society of Australia, vol. 32(2), pages 334-361, November.
    21. Terry Robinson, 2007. "The convergence of electricity prices in Europe," Applied Economics Letters, Taylor & Francis Journals, vol. 14(7), pages 473-476.
    22. P. Nillesen & M. Pollitt, 2010. "Using Regulatory Benchmarking Techniques to Set Company Performance Targets: The Case of Us Electricity," Competition and Regulation in Network Industries, Intersentia, vol. 11(1), pages 50-85, March.
    23. Quah, Danny, 1997. "Empirics for Growth and Distribution: Stratification, Polarization, and Convergence Clubs," CEPR Discussion Papers 1586, C.E.P.R. Discussion Papers.
    24. Quah, Danny T., 1996. "Empirics for economic growth and convergence," European Economic Review, Elsevier, vol. 40(6), pages 1353-1375, June.
    25. Rómulo A. Chumacero, 2002. "Is There Enough Evidence Against Absolute Convergence?," Working Papers Central Bank of Chile 176, Central Bank of Chile.
    26. Zachmann, Georg, 2008. "Electricity wholesale market prices in Europe: Convergence?," Energy Economics, Elsevier, vol. 30(4), pages 1659-1671, July.
    27. Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November.
    28. Vishal Chandr Jaunky, 2008. "Divergence in Per Capita Electric Power Consumption: An African Perspective," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 8(2), pages 137-150.
    29. David Roodman, 2009. "A Note on the Theme of Too Many Instruments," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 71(1), pages 135-158, February.
    30. Roberto Zelli & Maria Grazia Pittau, 2006. "Empirical evidence of income dynamics across EU regions," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 21(5), pages 605-628.
    31. Docquier, Frédéric & Lodigiani, Elisabetta & Rapoport, Hillel & Schiff, Maurice, 2016. "Emigration and democracy," Journal of Development Economics, Elsevier, vol. 120(C), pages 209-223.
    32. Quah, Danny T, 1997. "Empirics for Growth and Distribution: Stratification, Polarization, and Convergence Clubs," Journal of Economic Growth, Springer, vol. 2(1), pages 27-59, March.
    33. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Oxford University Press, vol. 58(2), pages 277-297.
    34. Judson, Ruth A. & Owen, Ann L., 1999. "Estimating dynamic panel data models: a guide for macroeconomists," Economics Letters, Elsevier, vol. 65(1), pages 9-15, October.
    35. Maza, Adolfo & Villaverde, José, 2008. "The world per capita electricity consumption distribution: Signs of convergence?," Energy Policy, Elsevier, vol. 36(11), pages 4255-4261, November.
    36. Jamasb, Tooraj & Pollitt, Michael, 2003. "International benchmarking and regulation: an application to European electricity distribution utilities," Energy Policy, Elsevier, vol. 31(15), pages 1609-1622, December.
    37. Meeusen, Wim & van den Broeck, Julien, 1977. "Efficiency Estimation from Cobb-Douglas Production Functions with Composed Error," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 18(2), pages 435-444, June.
    38. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
    39. Kiviet, Jan F., 1995. "On bias, inconsistency, and efficiency of various estimators in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 68(1), pages 53-78, July.
    40. Windmeijer, Frank, 2005. "A finite sample correction for the variance of linear efficient two-step GMM estimators," Journal of Econometrics, Elsevier, vol. 126(1), pages 25-51, May.
    41. Nazrul Islam, 1995. "Growth Empirics: A Panel Data Approach," The Quarterly Journal of Economics, Oxford University Press, vol. 110(4), pages 1127-1170.
    42. Ahamada, Ibrahim & Flachaire, Emmanuel, 2010. "Non-Parametric Econometrics," OUP Catalogue, Oxford University Press, number 9780199578009.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sueyoshi, Toshiyuki & Yuan, Yan & Goto, Mika, 2017. "A literature study for DEA applied to energy and environment," Energy Economics, Elsevier, vol. 62(C), pages 104-124.
    2. Grafström, Jonas & Jaunky, Vishal, 2017. "Convergence of Incentive Capabilities within the European Union," Ratio Working Papers 301, The Ratio Institute.
    3. Oseni, Musiliu O. & Pollitt, Michael G., 2014. "Institutional arrangements for the promotion of regional integration of electricity markets : international experience," Policy Research Working Paper Series 6947, The World Bank.
    4. Vishal Chandr Jaunky and Lin Zhang, 2016. "Convergence of Operational Efficiency in Chinas Provincial Power Sectors," The Energy Journal, International Association for Energy Economics, vol. 0(China Spe).
    5. Mardani, Abbas & Zavadskas, Edmundas Kazimieras & Streimikiene, Dalia & Jusoh, Ahmad & Khoshnoudi, Masoumeh, 2017. "A comprehensive review of data envelopment analysis (DEA) approach in energy efficiency," Renewable and Sustainable Energy Reviews, Elsevier, vol. 70(C), pages 1298-1322.

    More about this item

    Keywords

    Divergence; Technical efficiency; Electricity;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:62:y:2013:i:c:p:419-430. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/locate/enpol .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.