The Potential Benefits of Hilmer and Related Reforms: Electricity Supply
This article examines the macroeconomic impact of the elimination of x-inefficiency in the Australian electricity supply industry using a computable general equilibrium (CGE) model of the Australian economy. Data envelopment analysis and a stochastic production frontier model are applied to measure x-inefficiency in the electricity industry. It is assumed that microeconomic reform will eliminate this x-inefficiency. The potential increase in total factor productivity resulting from microeconomic reform is introduced into the CGE model as a Hicksian-neutral factor-augmenting technological change. Two alternative labour market assumptions are utilised in measuring the macroeconomic benefits of the microeconomic reform. The results suggest that even under the most pessimistic labour market assumptions, the potential benefits of microeconomic reform in an industry such as electricity will not be trivial. It therefore follows that the impact of microeconomic reform on economic growth could be substantial, particularly if the Australian labour market is more flexible than hitherto assumed.
|Date of creation:||Apr 1998|
|Contact details of provider:|| Postal: PO Box 14428, Melbourne, Victoria, 8001|
Phone: 03 9919 1877
Web page: http://www.copsmodels.com/about.htm
More information through EDIRC
References listed on IDEAS
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.:
- Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November.
- Battese, George E. & Coelli, Tim J., 1988. "Prediction of firm-level technical efficiencies with a generalized frontier production function and panel data," Journal of Econometrics, Elsevier, vol. 38(3), pages 387-399, July.
- Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
- Adams, Philip D. & Dixon, Peter B. & McDonald, Daina & Meagher, G. A. & Parmenter, Brian R., 1994. "Forecasts for the Australian economy using the MONASH model," International Journal of Forecasting, Elsevier, vol. 10(4), pages 557-571, December.
- Quiggin, J., 1995.
"Estimating the Benefits of Hilmer and Related Reforms,"
CEPR Discussion Papers
338, Centre for Economic Policy Research, Research School of Economics, Australian National University.
- John Quiggin, 1997. "Estimating the Benefits of Hilmer and Related Reforms," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 30(3), pages 256-272.
- Meeusen, Wim & van den Broeck, Julien, 1977. "Efficiency Estimation from Cobb-Douglas Production Functions with Composed Error," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 18(2), pages 435-44, June.
- Stevenson, Rodney E., 1980. "Likelihood functions for generalized stochastic frontier estimation," Journal of Econometrics, Elsevier, vol. 13(1), pages 57-66, May.
- Jondrow, James & Knox Lovell, C. A. & Materov, Ivan S. & Schmidt, Peter, 1982. "On the estimation of technical inefficiency in the stochastic frontier production function model," Journal of Econometrics, Elsevier, vol. 19(2-3), pages 233-238, August.
When requesting a correction, please mention this item's handle: RePEc:cop:wpaper:g-128. 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: (Mark Horridge)
If references are entirely missing, you can add them using this form.