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The Impact of Liberalization on the Production of Electricity in Japan

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  • Miyuki Taniguchi

    (Graduate School of Economics, Keio University)

Abstract

This study aims to measure the impact of liberalization on the efficiency of electricity production in Japan, and to examine whether or not economies of scope exist between electricity generation and transmission. Since 1995, liberalization of the electricity market in Japan has been phased in and regulations on entry have been relaxed three times. One motivation for these regulatory changes has been to improve the efficiency of electricity production by introducing competition. Using a panel data set on the nine main power companies in Japan over the period 1970-2010, fixed-effects and stochastic frontier estimates of the cost function are obtained and compared. Estimates of the cost function show that liberalization has improved cost efficiency. Economies of scope are found to exist for all firms.

Suggested Citation

  • Miyuki Taniguchi, 2013. "The Impact of Liberalization on the Production of Electricity in Japan," Keio/Kyoto Joint Global COE Discussion Paper Series 2012-027, Keio/Kyoto Joint Global COE Program.
    • Handle: RePEc:kei:dpaper:2012-027
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    File URL: http://ies.keio.ac.jp/old_project/old/gcoe-econbus/pdf/dp/DP2012-027.pdf
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    References listed on IDEAS

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    1. Șerban Georgescu, 2012. "Japan," Conjunctura economiei mondiale / World Economic Studies, Institute for World Economy, Romanian Academy.
    2. Arocena, Pablo, 2008. "Cost and quality gains from diversification and vertical integration in the electricity industry: A DEA approach," Energy Economics, Elsevier, vol. 30(1), pages 39-58, January.
    3. William W. Cooper & Lawrence M. Seiford & Kaoru Tone, 2007. "Data Envelopment Analysis," Springer Books, Springer, edition 0, number 978-0-387-45283-8, September.
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    Cited by:

    1. Li, Hong-Zhou & Kopsakangas-Savolainen, Maria & Xiao, Xing-Zhi & Lau, Sim-Yee, 2017. "Have regulatory reforms improved the efficiency levels of the Japanese electricity distribution sector? A cost metafrontier-based analysis," Energy Policy, Elsevier, vol. 108(C), pages 606-616.

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