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DEA and Dynamic Yardstick Competition in Scandinavian Electricity Distribution



  • Peter Bogetoft
  • Jørgen Tind

Multi-period multi-product regulatory schemes for electricity distributors are presented, based on cost information from a productivity analysis model and an agency theoretical decision model. The proposed schemes are operational and demonstrate considerable advantages compared to the popular CPI-X revenue cap regulation. The schemes avoid arbitrariness, excessively high or negative informational rents as well as ratchet effects and they promote rapid productivity catch-up by making full use of available data. More generally, the paper contributes to the theoretical unification between firm-based Data Envelopment Analysis (DEA) productivity models and micro-economic reimbursement theories. Copyright Springer Science+Business Media, Inc. 2005

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Article provided by Springer in its journal Journal of Productivity Analysis.

Volume (Year): 23 (2005)
Issue (Month): 2 (05)
Pages: 173-201

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Handle: RePEc:kap:jproda:v:23:y:2005:i:2:p:173-201
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  1. Kittelsen, S.A.C., 1993. "Stepwise DEA; Choosing Variables for Measuring Technical Efficiency in Norwegian Electricity Distribution," Memorandum 06/1993, Oslo University, Department of Economics.
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