Consistency Conditions: Efficiency Measures for the Electricity Distribution Sector in South America

Abstract

The main goals of this paper are basically two: to compare the relative efficiency of the firms in the electricity distribution sector in South America, and to perform a consistency analysis on the different approaches usually used to measure efficiency. The estimated model considers a single output (customers) and six variables standing for inputs and environmental characteristics (service area, sales, market structure, mains kilometres of distribution, number of employees and transformer capacity). Information on these variables comes from the CIER database for the accounting year ending in 1994. This model is in line with the previous literature on the subject. It has been found that, in general, the consistency conditions are met.Consistency Conditions; Efficiency Measures; Electricity Distribution Sector