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Electricity Distribution in the UK and Japan: A Comparative Efficiency Analysis 1985-1998

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  • Toru Hattori
  • Tooraj Jamasb
  • Michael Pollitt

Abstract

This paper examines the relative performance of electricity distribution systems in the UK and Japan between 1985 and 1998 using cost-based benchmarking with data envelopment analysis (DEA) and stochastic frontier analysis (SFA) methods. The results suggest that the productivity gain in the UK electricity distribution has been larger than in the Japanese sector. In particular, productivity growth accelerated during the last years when the UK utilities were operating under tightened revenue caps. It also suggests that efficiency scores are higher for UK utilities. The findings also highlight the advantages of using multiple techniques in comparative analysis and in incentive regulation.

Suggested Citation

  • Toru Hattori & Tooraj Jamasb & Michael Pollitt, 2005. "Electricity Distribution in the UK and Japan: A Comparative Efficiency Analysis 1985-1998," The Energy Journal, , vol. 26(2), pages 23-47, April.
    • Handle: RePEc:sae:enejou:v:26:y:2005:i:2:p:23-47
    DOI: 10.5547/ISSN0195-6574-EJ-Vol26-No2-2
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    2. Yun Zhang & Robert Bartels, 1998. "The Effect of Sample Size on the Mean Efficiency in DEA with an Application to Electricity Distribution in Australia, Sweden and New Zealand," Journal of Productivity Analysis, Springer, vol. 9(3), pages 187-204, March.
    3. Preetum Domah & Michael G. Pollitt, 2001. "The restructuring and privatisation of the electricity distribution and supply businesses in England," Fiscal Studies, Institute for Fiscal Studies, vol. 22(1), pages 107-146, March.
    4. Leland Gerson Neuberg, 1977. "Two Issues in the Municipal Ownership of Electric Power Distribution," Bell Journal of Economics, The RAND Corporation, vol. 8(1), pages 303-323, Spring.
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    More about this item

    Keywords

    Electricity distribution; technical efficiency; efficiency analysis; Incentive regulation; International comparison;
    All these keywords.

    JEL classification:

    • F0 - International Economics - - General

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