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Productivity growth in electric energy retail in Colombia. A bootstrapped malmquist indices approach

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  • Rodrigo Taborda

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  • Julieth Santamaría

    ()

Abstract

This paper offers a productivity growth estimate for electric energy commercialization firms in Colombia, using a non-parametric Malmquist bootstrap methodology. The estimation and methodology serve two main purposes. First, in Colombia commercialization firms are subject to a price-cap regulation scheme, a non-common arrangement in the international experience for this part of the industry. Therefore the paper’s result suggest an estimate of the productivity factor to be used by the regulator, not only in Colombia but in other countries where commercialization is a growing part of the industry (renewable energy, for instance). Second, because of poor data collection from regulators and firms themselves, regulation based on a single estimation of productivity seems inappropriate and error-prone. The nonparametric Malmquist bootstrap estimation allows an assessment of the result in contrast to a single one estimation. This would open an opportunity for the regulator to adopt a narrower and more accurate productivity estimation or override an implausible result and impose a productivity factor in the price-cap to foster the development of the industry.

Suggested Citation

  • Rodrigo Taborda & Julieth Santamaría, 2011. "Productivity growth in electric energy retail in Colombia. A bootstrapped malmquist indices approach," DOCUMENTOS DE TRABAJO 009152, UNIVERSIDAD DEL ROSARIO.
  • Handle: RePEc:col:000092:009152
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    File URL: http://repository.urosario.edu.co/bitstream/handle/10336/10844/9152.pdf
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    1. Leopold Simar & Paul Wilson, 2000. "A general methodology for bootstrapping in non-parametric frontier models," Journal of Applied Statistics, Taylor & Francis Journals, vol. 27(6), pages 779-802.
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    4. Larsen, Erik R. & Dyner, Isaac & Bedoya V., Leonardo & Franco, Carlos Jaime, 2004. "Lessons from deregulation in Colombia: successes, failures and the way ahead," Energy Policy, Elsevier, vol. 32(15), pages 1767-1780, October.
    5. Garcia, Alfredo & Arbelaez, Luis E., 2002. "Market power analysis for the Colombian electricity market," Energy Economics, Elsevier, vol. 24(3), pages 217-229, May.
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    11. Kelvin Balcombe & Sophia Davidova & Laure Latruffe, 2008. "The use of bootstrapped Malmquist indices to reassess productivity change findings: an application to a sample of Polish farms," Applied Economics, Taylor & Francis Journals, vol. 40(16), pages 2055-2061.
    12. Simar, Leopold & Wilson, Paul W., 1999. "Estimating and bootstrapping Malmquist indices," European Journal of Operational Research, Elsevier, vol. 115(3), pages 459-471, June.
    13. 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.
    14. Emrouznejad, Ali & Parker, Barnett R. & Tavares, Gabriel, 2008. "Evaluation of research in efficiency and productivity: A survey and analysis of the first 30 years of scholarly literature in DEA," Socio-Economic Planning Sciences, Elsevier, vol. 42(3), pages 151-157, September.
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    Keywords

    DEA; Malmquist; Productivity growth; Bootstrap; Electricity commercialization; Colombia;

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