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Incentive Regulation and the Role of Convexity in Benchmarking Electricity Distribution: Economists versus Engineers

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  • E. Grifell-Tatje
  • K. Kerstens

    (LEM - Lille - Economie et Management - CNRS - Centre National de la Recherche Scientifique - UCL - Université catholique de Lille - Université de Lille)

Abstract

This note illustrates the potential impact of the specification of a convex production technology on establishing minimal costs compared to the use of a non-convex technology when benchmarking electricity distributors. This methodological reflection is mainly motivated by recent engineering literature providing evidence for non-convexities in electricity distribution. An empirical illustration using non-parametric specifications of technology illustrates this main point using a sample of Spanish electricity distribution firms earlier analysed in Grifell-Tatjé and Lovell (2003).
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • E. Grifell-Tatje & K. Kerstens, 2008. "Incentive Regulation and the Role of Convexity in Benchmarking Electricity Distribution: Economists versus Engineers," Post-Print hal-00280784, HAL.
  • Handle: RePEc:hal:journl:hal-00280784
    Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-00280784
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    1. repec:pal:jorsoc:v:68:y:2017:i:11:d:10.1057_s41274-016-0162-7 is not listed on IDEAS
    2. Giovanni Cesaroni & Kristiaan Kerstens & Ignace Van de Woestyne, 2017. "Estimating scale economies in non-convex production models," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 68(11), pages 1442-1451, November.
    3. Víctor Giménez & Claudio Thieme & Diego Prior & Emili Tortosa-Ausina, 2017. "An international comparison of educational systems: a temporal analysis in presence of bad outputs," Journal of Productivity Analysis, Springer, vol. 47(1), pages 83-101, February.

    More about this item

    JEL classification:

    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

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