Technical efficiency in electricity generation - the impact of smallness and isolation of island economies

Technical efficiency in electricity generation - the impact of smallness and isolation of island economie

Separation of uncontrollable factors and time shift effects from DEA scores

総合政策 / Multi Disciplinary policy studiesIt has been pointed out that DEA scores may be influenced by several external environmental factors, which are uncontrollable for DMUs. It implies that the DEA efficiency score without data adjustment might be biased and impractical for measuring genuine management efficiency. Therefore it is essential to eliminate uncontrollable effects from DEA scores and evaluate “pure” managerial efficiency for DMUs. In an effort to solve this problem, we employ a multi-stage data adjustment procedure using DEA and regression models, which is originally proposed by Fried et al. [1999] consisting of four stages. In this study, we further modify this procedure by introducing newly developed devices in each stage; Connected Slacks-Based Measure (CSBM) model at the first and fourth stages, the Tobit model with DMU dummies at the second stage, and a data tuning procedure at the third stage. Then we decompose the technical inefficiency into three factors, i.e. environmental effects, time shift effects and pure technical inefficiency. Lastly, we apply this procedure to the electric power utilities in Japan and the US and compare their pure technical efficiency and causes of inefficiency.http://www.grips.ac.jp/list/facultyinfo/tone_kaoru

Comparing Brazil and USA electricity performance; what was the impact of privatisation?

Beginning in 1995 a large proportion of the Brazilian electricity distribution sector went through privatisation and restructuring, whereas privately-owned U.S. utilities did not suffer similar ownership change process. This paper is an empirical assessment of the efficiency of the Brazilian distribution sector relative to its U.S. counterpart in 1994 and 2000. Two techniques are applied: Data Envelopment Analysis (DEA), including the computation of Malmquist indices of productivity growth, and Stochastic Frontier Analysis (SFA). For the models that use operating costs as input, we find a positive but not statistically significant impact of Brazilian privatisation on technical efficiency. For the models that use total costs, the impact is significantly negative. Although this should be taken with caution, the negative impact can be the result of an investment surge after privatisation or of an increased rate of substitution of capital for labour in the Brazilian distribution sector. These results suggest that capital costs should not be excluded from the benchmarking. The findings also highlight the importance of establishing standard measures of capital costs for international benchmarking and incentive based regulation

Essays on deregulation in the electricity generation sector

Over that past three decades, power sector reform has been a key pillar of policy agendas in more than half of the countries across the world. This thesis specifically concerns the empirical investigation of the economic performance of the international electricity generation industry. Drawing on the stochastic frontier analysis techniques, the thesis considers the influence of reform as exogenous factors in shifting frontier technology as well as shaping inefficiency function directly -determinants and heteroscedasticity variables. The first essay uses an extensive panel dataset of 91 countries over the period 1980 to 2010 to measure the impact of deregulation on efficiency and total productivity growth using stochastic input distance frontier (SIDF). Three specific issues are addressed in the first essay: (1) the relationship between deregulation and technical efficiency, (2) the extent of the rank correlation of the country intercepts with deregulation via their position on the frontier, (3) the trend of total factor productivity and its components. We establish a positive impact of deregulation on efficiency and some compelling evidence suggesting that the country intercepts equally account for the influence of deregulation aside efficiency. In particular, the technical efficiency index from the first paper reveals that most OECD European countries are consistently efficient. Building on this finding, the second essay investigates the performance in term of cost efficiency for electricity generation in OECD power sector while accounting for the impact of electricity market product regulatory indicators. Empirical models are developed for the cost function as a translog form and analysed using panel data of 25 countries during the period 1980 to 2009. We show that it is necessary to model latent country-specific heterogeneity in addition to time-varying inefficiency. The estimated economies of scale are adjusted to take account of the importance of the quasi-fixed capital input in determining cost behaviour, and adjusted economies of scale are verified for the OECD generation sector. The findings suggest there is a significant impact of electricity market regulatory indicators on cost. Cost complementarity between generation and emissions found to be significant, indicating the possibility of reducing emissions without necessarily reducing electricity generation. Finally, the third essay examines the performance of electric power industry s using consistent state-level electricity generation dataset for the US contiguous states from 1998-2014. We estimate stochastic production frontier for five competing models in order to identify the determinants of technical inefficiency and marginal effects. We find evidence of positive impacts of deregulation on technical efficiency across the models estimated. Our preferred model shows that deregulated states are more efficient in electricity generation than non-deregulated states. The result of the marginal effects shows that deregulation has a positive and monotonic effect on the technical efficiency

Infrastructure performance and reform in developing and transition economies: evidence from a survey of productivity measures

The authors review about 80 studies on electricity and gas, water and sanitation, and rail and ports (with a footnote on telecommunications) in developing countries. The main policy lesson is that there is a difference in the relevance of ownership for efficiency between utilities and transport in developing countries. In transport, private operators have tended to perform better than public operators. For utilities, ownership often does not matter as much as sometimes argued. Most cross-country studies find no statistically significant difference in efficiency scores between public and private providers. As for the country-specific studies, some do find differences in performance over time but these differences tend to matter much less than a large number of other variables. Across sectors, private operators functioning in a competitive environment or regulated under price caps or hybrid regulatory regimes tend to catch up best practice faster than public operators. There is a very strong case to push regulators in developing and transition economies toward a more systematic reliance on yardstick competition in a sector in which residual monopoly powers tend to be common.Enterprise Development&Reform,Labor Policies,Banks&Banking Reform,Environmental Economics&Policies,Economic Theory&Research,Environmental Economics&Policies,Economic Theory&Research,Banks&Banking Reform,Health Monitoring&Evaluation,Health Economics&Finance

Regulation and efficiency in UK public utilities

[From the Introduction]:The divestiture of formerly nationalised public utilities during the 1980s and 1990s in the UK and elsewhere was accompanied by the vertical unbundling of their natural monopoly elements, i.e. the physical distribution networks, from upstream activities such as electricity generation and gas supply and downstream activities such as retail in order to facilitate competition in the latter. The expectation was that opening up these upstream activities to private firms would foster competition, which would in turn lead to improvements in efficiency, lower prices and increased consumer welfare. There are, on the other hand, possibilities for considerable rents to be made; these could be in the form of profits, but given the regulation that the firms face and the degree of informational asymmetry between utility managers and other stakeholders, such as regulators, shareholders, and customers, they may also take the form of slack within the firm, and the maximisation of managerial utility.We analyse the effect of RPI-X regulation on the efficiency of the UK’s water and sewage and electricity distribution industries using stochastic frontier analysis. We extend the literature in several ways; first, in the case of the water and sewage industry, we look at efficiency not only on the cost side, but also on the revenue side. Second, following the findings of Restrepo-Tobón and Kumbhakar (2014) on the shortcomings of the direct estimation of the alternative profit frontier, we show that the profit maximisation problem of a monopolist with fixed scale characteristics separates into separate cost minimisation and revenue maximisation problems, then derive an alternative specification for the revenue frontier with a firmer basis in theory. Third, we include the publicly-owned Northern Ireland Water and Scottish Water, and the three former Scottish Water Authorities that preceded the latter, in our water cost and revenue analyses, and likewise include Northern Ireland Electricity in one of our cost analyses, providing an original insight into the performance of these utilities relative to their English and Welsh and Great British counterparts, respectively. In addition, we use more recent samples than those found in the literature, providing new evidence relating to the latest price control periods in both industries.We derive two new formulae for calculating the marginal effects of environmental variables on efficiency, and apply these to analyse the impact of annual price caps and time trends on revenue and cost efficiency, giving an insight into the static and dynamic impacts of RPI-X regulation, while also examining the impact of board composition variables and public ownership.This thesis is organised into seven chapters. In the remainder of Chapter 1, we give a short history of the UK water and electricity industries. In Chapter 2, we introduce basic efficiency-related concepts, before moving on to discuss issues of market power and firm performance in utility firms, and the theory relating to utility regulation.In Chapter 3, we review the literature on frontier analysis, introducing some of the main data envelopment analysis (DEA) and stochastic frontier analysis (SFA) methods in particular. The relative advantages and disadvantages of each method are considered, and the features of the method used in the subsequent empirical chapters are discussed.Chapter 4 reviews the empirical literature on the performance of water and electricity utilities in the UK and internationally, along with several papers on the impact of regulation on the performance in other utility industries. Chapter 5 and Chapter 6 apply SFA to analyse the efficiency of UK water and sewage and electricity distribution utilities, respectively. Efficiency predictions are discussed and compared, trends are discussed, and the marginal effects of our environmental variables on the various efficiency measures are derived and discussed at length.Finally, Chapter 7 summarises the conclusions from our analyses and relates them back to the existing literature, and discusses implications for utility performance and policy. The limitations of this thesis, and suggestions for future research, are also discussed

Agglomeration economies, firm-level efficiency and productivity growth: empirical evidence from Indonesia

This thesis examines the effect of agglomeration economies on firm-level efficiency and productivity growth in Indonesian manufacturing industries. The stochastic production frontier (SPF), Färe-Primont productivity index and econometric estimation are applied. Empirical results show evidence of positive specialization effects and negative diversity effects, indicating that specialization is more favourable than diversity for stimulating firm-level efficiency and productivity growth. It confirms that inter-firm knowledge spillovers are transmitted in the regions that consist of homogeneous industries

The change of the Spanish tourist model: From the Sun and Sand to the Security and Sand

There is evidence of specialisation in tourism destinations, but also a lack of literature regarding itsimpact on tourism regional performance. This study aims to contribute to the analysis of thedeterminants of tourism performance. To this end, the efficiency of 17 Spanish regions has beenestimated by meta-frontier data envelopment analysis techniques over the 2008-2018 period. In thesecond stage, we adopt the bootstrapping method proposed by Simar and Wilson to measure theimpact of explanatory factors on tourism efficiency. The results suggest that regions specialised intourism may achieve higher efficiency levels. However, there is evidence of a catching-up process inthe tourism technology of the Spanish regions over the last 10 years. Results also suggest thatsand(kilometres of beaches) andinsecurityare the key drivers of tourism efficiency. Moreover,naturalattractionsis the factor that most positively influences efficiency in non-specialised region

Essays on efficiency and international tourism

RESUMEN: Esta tesis doctoral consta de tres ensayos sobre la economía del turismo. En el primer y tercer ensayo se realiza un análisis de eficiencia turística de las regiones españolas y de los factores que pueden estar determinando su evolución. En el segundo ensayo se hace una profunda revisión bibliográfica sobre la literatura que analiza la eficiencia turística a nivel mundial. El período de análisis abarca desde la última mitad del siglo XX (entre 1978 en el caso del estudio de la bibliografía turística, año en el que Charnes, Cooper y Rhodes introducen el Análisis Envolvente de Datos) hasta el periodo más reciente de nuestra economía (2018 en el tercer ensayo). En los dos ensayos que analizan la eficiencia turística en España el periodo comprende desde inicios del siglo XXI (2008 en el caso de la eficiencia de los destinos turísticos españoles) hasta los datos más actuales disponibles en este momento.ABSTRACT: This doctoral thesis consists of three essays on the economics of tourism. In the first and third essay an analysis of tourist efficiency of the Spanish regions and of the factors that may be determining their evolution is carried out. In the second essay, an in-depth bibliographical review is done on the literature that analyzes tourism efficiency worldwide. The analysis period covers from the last half of the twentieth century (between 1978 in the case of the study of the tourist bibliography, year in which Charnes, Cooper and Rhodes introduce the Data Envelope Analysis) until the most recent period of our economy ( 2018 in the third essay). In the two essays that analyze tourism efficiency in Spain, the period ranges from the beginning of the 21st century (2008 in the case of the efficiency of Spanish tourist destinations) to the most current data available at this time

Agricultural Productivity in Space

openQuesta tesi ha l’obiettivo di misurare la produttività totale dei fattori in agricoltura in Italia nel periodo 2008-2014 e di capirne i caratteri salienti. Attraverso l’utilizzo di micro dati delle aziende agricole commerciali campionate dalla RICA (Rete di Informazione Contabile Agricola) e dei numeri indice, si derivano indici di produttività a livello nazionale, regionale, provinciale, e a livello di specializzazione produttiva e di dimensione economica. Gli indici di produttività sono generati attraverso la procedura del minimum spanning tree (Hill, 1999; Hill 2004) e sono quindi comparabili tra le varie unità nel tempo. I risultati mostrano una performance decrescente nell’arco dei sette anni considerati. Sia a livello nazionale che a livello di specializzazione produttiva e di dimensione economica, gli indici mostrano un andamento decrescente. A livello di dimensione si registra una relazione positiva tra produttività e dimensione economica delle aziende con ampi differenziali tra le classi dimensionali esaminate. Per quanto riguarda le specializzazioni produttive, livelli maggiori di produttività si registrano per quelle specializzazioni che possono essere considerate di carattere maggiormente professionale. In particolare i bovini da latte, l’ortofloricoltura, la frutticoltura e la viticoltura sono le specializzazioni produttive a più alta performance. I granivori, gli erbivori, la cerealicoltura, i seminativi e le aziende miste mostrano invece una performance inferiore rispetto alle prime. A livello regionale si evidenziano due cluster di regioni ad alta produttività. Uno è composto da Emilia-Romagna, Lombardia, Trentino, Alto Adige, Veneto e Friuli Venezia Giulia e l’altro al Sud è composto da Calabria e Basilicata. La produttività sembra essere legata alla composizione delle singole agricolture regionali in termini di tipologia di produzione e di dimensione economica. Ulteriori analisi saranno comunque necessarie al fine di stabilire una relazione tra la composizione agricola regionale e la performance economic. Nella seconda parte della ricerca gli indici a livello provinciale vengono utilizzati per capire i differenziali di produttività tenendo in considerazione il più possibile la variabilità territoriale italiana. La TFP a livello provinciale mostra una lieve tendenza alla clusterizzazione spaziale. Il grado di dipendenza spaziale viene quantificato in un modello lineare che assume dipendenza spaziale, dipendenza temporale e la presenza di una serie di variabili esogene. Il modello viene stimato con lo stimatore BCLSDV (Bias Corrected Least Squares Dummy Variable). Le stime mostrano un basso grado di dipendenza temporale e un alto grado di dipendenza spaziale assumendo però una struttura di correlazione spaziale limitata a 50-70 chilometri. I risultati delle stime vengono utilizzati per quantificare gli effetti di diffusione a seguito di uno shock esogeno di produttività nelle varie province. Ciò che emerge è che, data la struttura di correlazione spaziale assunta e data la bassa dipendenza temporale, gli effetti di uno shock di produttività sono limitati nel tempo e nello spazio. Questi si estendono anche a province lontane dall’epicentro dello shock ma con caratteri diversi rispetto a quelle vicine. In particolare, l’effetto spillover di lungo periodo è maggiore nelle regioni limitrofe allo shock e viene raggiunto in un tempo decisamente inferiore rispetto alle province più lontane. Questi risultati vengono interpretati come evidenza dello stretto legame tra territorio e produzione agricola. Questo legame è in grado di influenzare i caratteri e lo sviluppo delle agricolture locali.The research aims at measuring agricultural total factor productivity in Italy over the period 2008-2014 and at understanding its main features. It leverages farm-level information from the FADN (Farm Accountancy Data Network) database e the index number methodology to derive indexes at either geographical level and at the level of farm types. At geographical level, indexes are derived at national level, at the level of FADN regions and at NUTS3 level. Then, indexes are derived at the level of farm typology and of economic size. Indexes are derived using the minimum spanning tree method and are comparable across spatial units over time. Results point to a decline in aggregate productivity over time. Indexes at national level, at the level of economic size and at the level of farm typologies all exhibit general downward trends. A positive relationship between TFP and economic size is found with large productivity differentials across size classes. Large differentials are also found across types of farms. The types associated to a more entrepreneurial nature, such as dairy, horticulture, fruit production and grapes and wine production, are all associated with higher productive performance with respect to the others. At the level of FADN regions, there seem to be two clusters of highly productive regions. One is in the North and is composed of Emilia-Romagna, Lombardia, Veneto, Friuli Venezia Giulia, Trentino and Alto Adige. The other is in the South and is composed of Calabria and Basilicata. TFP seems to be linked to the structure of the regional agricultures in terms of types of farming and size of farms. However, further analyses would be required to establish a relationship between productivity and agricultural composition of geographical regions. In the second part of the research, measurements at NUTS3 level are used to inspect productivity differentials considering the spatial variability of the Italian territory. A limited degree of productivity clustering is found at NUTS3 level. Spatial dependence is quantified in a linear model that assumes also temporal dependence of TFP and controls for covariates. The model is estimated with the BCLSDV (Bias Corrected Least Squares Dummy Variable) estimator. Assuming a narrow spatial correlation structure, estimates show a limited degree of temporal dependence and a high degree of spatial dependence. Coefficient estimates are then used to model the diffusion process of a productivity shock hitting specific NUTS3. Evidences from the exercise show that, due to the narrow spatial correlation structure assumed and the limited temporal dependence, the effects of a shock are limited in space and over time. Effects of a shock differ depending on the distance of NUTS3 from the epicenter of the shock. Neighboring NUTS3 receive, in a shorter time frame, a larger long-run spillover effect with respect to NUTS3 that are further away. This results is an evidence of the site-specificity of agricultural production. The close link that exists between locations and agriculture influence production practices and their development.ECONOMIA POLITICA Baldoni, EdoardoBaldoni, Edoard