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Regulation, Ownership Form, And The Economic Efficiency Of Rural Electric Distribution Cooperatives

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  • Daniel R. Hollas

    (University of Texas at San Antonio)

  • Stanley R. Stansell

    (East Carolina University)

Abstract

This paper uses a translog profit function to analyze economic efficiency in rural electric distribution cooperatives for the period 1974-1982. Hypotheses dealing with absolute price efficiency, the effect of capital on profit and the effect of service area density on profit are tested. The paper uses a translog profit function analysis with both fixed and variable inputs to test the various hypotheses. Regulatory intensity variables are developed and used to examine the effect of regulation on technical efficiency. The results indicate that cooperatives are not profit maximizers, regulation has a negligible effect on technical efficiency, capital positively affects profit, and increasing service area density positively affects profit.

Suggested Citation

  • Daniel R. Hollas & Stanley R. Stansell, 1991. "Regulation, Ownership Form, And The Economic Efficiency Of Rural Electric Distribution Cooperatives," The Review of Regional Studies, Southern Regional Science Association, vol. 21(2), pages 201-220, Summer.
    • Handle: RePEc:rre:publsh:v21:y:1991:i:2:p:201-220
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    References listed on IDEAS

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    Cited by:

    1. Hrozencik, R. Aaron, 2018. "Energy, Food, and Water; Electricity Cooperative Pricing and Groundwater Irrigation Decisions," 2018 Annual Meeting, August 5-7, Washington, D.C. 274322, Agricultural and Applied Economics Association.
    2. Claggett, E. Jr. & Hollas, Daniel R. & Stansell, Stanley R., 1995. "The effects of ownership form on profit maximization and cost minimization behavior within municipal and cooperative electrical distribution utilities," The Quarterly Review of Economics and Finance, Elsevier, vol. 35(35), pages 533-550.
    3. Greer, Monica Lynne, 2003. "Can rural electric cooperatives survive in a restructured US electric market? An empirical analysis," Energy Economics, Elsevier, vol. 25(5), pages 487-508, September.
    4. Giovanni Fraquelli & Roberto Giandrone, 1997. "Costs, Technology And Ownership Form Of Natural Gas Distribution In Italy," CERIS Working Paper 199713, CNR-IRCrES Research Institute on Sustainable Economic Growth - Torino (TO) ITALY - former Institute for Economic Research on Firms and Growth - Moncalieri (TO) ITALY.
    5. Paola Fabbri & Giovanni Fraquelli & Roberto Giandrone, 2000. "Costs, technology and ownership of gas distribution in Italy," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 21(2), pages 71-81.

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