Relative Performance of UK and Japanese Electricity Distribution Systems 1985-1998: Lessons for Incentive Regulation
International comparisons can be used to study relative efficiency of decision-making units in an industry in a wider context. In particular, cross-country comparisons can, help regulators of natural monopoly firms to assess the relative performance of their regulation regime and national firms with those of other countries. The relative performance of frontier firms is important as these may be subject to lax regulation and could constitute benchmarks for regulation of other firms. The results of empirical studies can be sensitive to the choice of techniques and models. The UK and Japanese electricity distribution utilities have been subject to yardstick regulation since 1990 and 1996 respectively. In this paper we present an analysis of the development and relative performance of electricity distribution utilities in the UK and Japan between 1985 and 1998. The results allow the examination of the impact of privatisation and regulation on the UK firms and their scope for further efficiency gains. The paper presents the findings from applying input distance functions with data envelopment analysis (DEA), stochastic frontier analysis (SFA), and corrected ordinary least square (COLS) techniques using cost based model specifications in a dynamic setting.
|Date of creation:||May 2002|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.econ.cam.ac.uk/index.htm|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Richard J. Gilbert and David M. Newbery., 1988.
Economics Working Papers
8879, University of California at Berkeley.
- Gilbert, Richard & Newbery, David M G, 1988. "Regulation Games," CEPR Discussion Papers 267, C.E.P.R. Discussion Papers.
- Gilbert, Richard J. & Newbery, David M., 1988. "Regulation Games," Department of Economics, Working Paper Series qt50s6h8c6, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- Burns, Philip & Weyman-Jones, Thomas G, 1996. "Cost Functions and Cost Efficiency in Electricity Distribution: A Stochastic Frontier Approach," Bulletin of Economic Research, Wiley Blackwell, vol. 48(1), pages 41-64, January.
- Jamasb, T. & Pollitt, M., 2000. "Benchmarking and regulation: international electricity experience," Utilities Policy, Elsevier, vol. 9(3), pages 107-130, September.
- Paul L. Joskow, 2006. "Incentive Regulation for Electricity Networks," CESifo DICE Report, Ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 4(2), pages 3-9, 07.
- Coelli, Tim & Perelman, Sergio, 1999. "A comparison of parametric and non-parametric distance functions: With application to European railways," European Journal of Operational Research, Elsevier, vol. 117(2), pages 326-339, September.
- Battese, G E & Coelli, T J, 1995. "A Model for Technical Inefficiency Effects in a Stochastic Frontier Production Function for Panel Data," Empirical Economics, Springer, vol. 20(2), pages 325-32.
- 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.
- Domah, P. & Pollitt, M.G., 2000. "The Restructuring and Privatisation of Electricity Distribution and Supply Businesses in England and Wales: A Social Cost Benefit Analysis," Cambridge Working Papers in Economics 0007, Faculty of Economics, University of Cambridge.
- Jamasb, T. & Pollitt, M., 2001. "Benchmarking and Regulation of Electricity Transmission and Distribution Utilities: Lessons from International Experience," Cambridge Working Papers in Economics 0101, Faculty of Economics, University of Cambridge.
- Jamasb, T. & Pollitt, M., 2001. "International Benchmarking and Yardstick Regulation: An Application to European Electricity Utilities," Cambridge Working Papers in Economics 0115, Faculty of Economics, University of Cambridge.
When requesting a correction, please mention this item's handle: RePEc:cam:camdae:0212. 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: (Jake Dyer)
If references are entirely missing, you can add them using this form.