The Case for International Coordination of Electricity Regulation: Evidence from the Measurement of Efficiency in South America

By Antonio Estache, Martín A. Rossi, Christian A. Ruzzier. 2002

177 citations recorded by the source corpus.

A decade of experience has shown that monitoring the performance of public and private monopolies is the hardest part of electricity sector reform in South America—because operators control most of the information needed for effective regulation. South American electricity regulators can reduce this information asymmetry by increasing international coordination and relying on comparative measures of efficiency. To make it possible for them to do so, countries should harmonize their regulatory databases and develop methodologies for making comparisons. This paper uses data envelopment analysis and stochastic frontier analysis to estimate the efficiency of South America's main electricity distribution companies. Both approaches allow regulators to use relatively simple tests to check the robustness of their findings, strengthening their positions at regulatory hearings.

View Paper: https://www.semanticscholar.org/paper/f4b9144f188342f3a4501199fad01d9b074fdae3

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Citations in the corpus

Quo vadis efficiency analysis of water distribution? A comparative literature review (2009, background): “Still below the threshold, we suggest that mergers are an appropriate response.”
Application of Panel Data Models in Benchmarking Analysis of the Electricity Distribution Sector (2006, unknown): “Estache et al. (2004) provide more or less similar discrepancies between parametric and non-parametric methods applied to a sample of power distributors from South America.”
Regulation of Natural Monopoly (2007, unknown): “However, hedonic regression, frontier cost function estimation and related statistical techniques can be used to normalize cost variations for exogenous differences in firm attributes to develop normalized benchmark costs [Jamasb and Pollitt (2001, 2003), Estache, Rossi, and Ruzzier (2004)].”
Efficiency analysis of German electricity distribution utilities – non-parametric and parametric tests (2006, background): “In a similar panel data analysis for six Latin America countries, Estache et al. (2004) also show that national regulators can reduce information asymmetry through cross-country efficiency analysis.”
Cost efficiency of Slovenian water distribution utilities: an application of stochastic frontier methods (2008, unknown): “2 For example, see Bauer et al. (1998), Estache et al. (2004) , Jamasb”
Competition, Regulation and Privatisation of Electricity Generation in Developing Countries: Does the Sequencing of the Reforms Matter? (2005, methodology): “In common with a number of other studies (e.g, Estache et al., 2004) we use the number of employees as the labour input but also include GDP per capita as an environmental variable to, in part, proxy skill distributions across countries (ibid., p.275).4 Labour productivity and capacity utilisation…”