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Measuring Productivity When Technologies Are Heterogeneous: A Semi-Parametric Approach for Electricity Generation

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  • Stefan Seifert

Abstract

While productivity growth in electricity generation is associated with multiple positive effects from an economic and environmental perspective, measuring it is challenging. This paper proposes a framework to estimate and decompose productivity growth for a sector characterized by multiple technologies. Using a metafrontier Malmquist decomposition and frontier estimation based on stochastic non-smooth envelopment of data (StoNED) allows for productivity estimation with few microeconomic assumptions. Additionally, evaluation of productivity at representative hypothetical units permits distribution-free analysis for the whole distribution of power plant sizes. The proposed framework is used to analyze a unique and rich dataset of coal, lignite, gas, and biomass-fired generators operating in Germany from 2003 to 2010. The results indicate stagnating productivity for the sector as a whole, technical progress for biomass plants, and very high productivity for gas-fired plants.

Suggested Citation

  • Stefan Seifert, 2015. "Measuring Productivity When Technologies Are Heterogeneous: A Semi-Parametric Approach for Electricity Generation," Discussion Papers of DIW Berlin 1526, DIW Berlin, German Institute for Economic Research.
  • Handle: RePEc:diw:diwwpp:dp1526
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    Cited by:

    1. Stefan Seifert, 2016. "Semi-Parametric Measures of Scale Characteristics of German Natural Gas-Fired Electricity Generation," Discussion Papers of DIW Berlin 1571, DIW Berlin, German Institute for Economic Research.

    More about this item

    Keywords

    Productivity estimation; Metafrontier Malmquist Decomposition; Stochastic Non-Smooth Envelopment of Data (StoNED); Electricity and Heat Generation in Germany; 2003 - 2010;

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

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