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A data envelopment analysis of gas utilities' efficiency

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  • Daniel Hollas
  • Kenneth Macleod
  • Stanley Stansell

Abstract

This study examines the Natural Gas Policy Act of 1978 and Federal Energy Regulatory Commission (FERC) policies that culminated in Order 636 in 1992. The regulatory environment in which natural gas distribution utilities operate was altered. FERC policies forced local gas distribution utilities into an increasingly competitive environment. Restructuring of the industry may affect economic efficiency. Data Envelopment Analysis is used to examine the economic efficiency of gas distributors during 1975–94. Federal policy appears to lead to a reduction in scale due to restructuring and more competition. Reduced scale economies have not altered the economic efficiency of the utilities. Copyright Springer 2002

Suggested Citation

  • Daniel Hollas & Kenneth Macleod & Stanley Stansell, 2002. "A data envelopment analysis of gas utilities' efficiency," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 26(2), pages 123-137, June.
    • Handle: RePEc:spr:jecfin:v:26:y:2002:i:2:p:123-137
    DOI: 10.1007/BF02755980
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    References listed on IDEAS

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    1. F. M. Scherer, 1967. "Research and Development Resource Allocation Under Rivalry," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 81(3), pages 359-394.
    2. Hollas, Daniel R. & Herren, Robert Stanley, 1982. "An estimation of the deadweight and x-efficiency losses in the municipal electric industry," Journal of Economics and Business, Elsevier, vol. 34(3), pages 269-281.
    3. Thomas C. Gorak & Dennis J. Ray, 1995. "Efficiency and Equity in the Transition to a New Natural Gas Market," Land Economics, University of Wisconsin Press, vol. 71(3), pages 368-385.
    4. R. D. Banker & A. Charnes & W. W. Cooper, 1984. "Some Models for Estimating Technical and Scale Inefficiencies in Data Envelopment Analysis," Management Science, INFORMS, vol. 30(9), pages 1078-1092, September.
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    Citations

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    Cited by:

    1. Neumann, Anne & Nieswand, Maria & Schubert, Torben, 2016. "Estimating Alternative Technology Sets in Nonparametric Efficiency Analysis: Restriction Tests for Panel and Clustered Data," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 45(1), pages 35-51.
    2. J Sarkis & J J Cordeiro, 2009. "Investigating technical and ecological efficiencies in the electricity generation industry: are there win-win opportunities?," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 60(9), pages 1160-1172, September.
    3. Delmas, Magali & Tokat, Yesim, 2003. "Deregulation Process, Governance Structures and Efficiency: The U.S. Electric Utility Sector," Research Papers 1790, Stanford University, Graduate School of Business.
    4. Corrado Lo Storto, 2018. "A Nonparametric Economic Analysis of the US Natural Gas Transmission Infrastructure: Efficiency, Trade-Offs and Emerging Industry Configurations," Energies, MDPI, vol. 11(3), pages 1-24, February.
    5. Ariel Casarin, 2014. "Productivity throughout regulatory cycles in gas utilities," Journal of Regulatory Economics, Springer, vol. 45(2), pages 115-137, April.
    6. Corrado Lo Storto, 2018. "Efficiency, Conflicting Goals and Trade-Offs: A Nonparametric Analysis of the Water and Wastewater Service Industry in Italy," Sustainability, MDPI, vol. 10(4), pages 1-22, March.
    7. Brooks, Mary R. & Cullinane, Kevin, 2006. "Chapter 26 Conclusions and Research Agenda," Research in Transportation Economics, Elsevier, vol. 17(1), pages 631-660, January.
    8. Gugler, Klaus & Liebensteiner, Mario, 2019. "Productivity growth and incentive regulation in Austria's gas distribution," Energy Policy, Elsevier, vol. 134(C).
    9. Capece, Guendalina & Costa, Roberta & Di Pillo, Francesca, 2021. "Benchmarking the efficiency of natural gas distribution utilities in Italy considering size, ownership, and maturity," Utilities Policy, Elsevier, vol. 72(C).
    10. Giovanni Fraquelli, 2007. "Optimal Scale and Efficiency of the Italian Public Utilities," L'industria, Società editrice il Mulino, issue 1, pages 205-228.

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