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Spatial-Temporal Dimensions of Efficiency among Electric Cooperatives in the Philippines

Author

Listed:
  • Rouselle F. Lavado

    (PIDS)

  • Erniel B. Barrios

Abstract

The efficiency of 119 electric cooperatives in the Philippines from 1990-2002 is analyzed using a stochastic frontier model augmented with spatial-temporal terms, addressing the underestimation of technical efficiency usually encountered among maximum-likelihood based methods. The model is also robust to the choice of environmental variables that will be included in the inefficiency equation provided that the spatial distance measure substantially captures the efficiency-enhancing factors. The average of estimated technical efficiency is 0.86. The growth in technical efficiency of 1-2% per year is explained by the slow adjustment process in the operation of the cooperatives lacking the medium to feedback production outcomes in the previous year to their operation cycle in the following year. Medium-sized cooperatives need to organize for strategic competitive advantage and to facilitate attainment of production efficiency.

Suggested Citation

  • Rouselle F. Lavado & Erniel B. Barrios, 2008. "Spatial-Temporal Dimensions of Efficiency among Electric Cooperatives in the Philippines," Development Economics Working Papers 22643, East Asian Bureau of Economic Research.
    • Handle: RePEc:eab:develo:22643
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    File URL: http://www.eaber.org/node/22643
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    Cited by:

    1. Carlos Primo C. David & Peter Julian A. Cayton & Theresa E. Lorenzo & Eduardo C. Santos, 2014. "Statistical analysis of Philippine water district characteristics and how these affect water tariffs," Water International, Taylor & Francis Journals, vol. 39(1), pages 1-9, January.

    More about this item

    Keywords

    stochastic frontier; technical efficiency; electric cooperative; spatial externalities;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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