Measuring Productivity When Technologies Are Heterogeneous: A Semi-Parametric Approach for Electricity Generation

Stefan Seifert

No 1526, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research

Abstract: While productivity growth in electricity generation is associated with multiple positive effects from an economic and environmental perspective, measuring it is challenging. This paper proposes a framework to estimate and decompose productivity growth for a sector characterized by multiple technologies. Using a metafrontier Malmquist decomposition and frontier estimation based on stochastic non-smooth envelopment of data (StoNED) allows for productivity estimation with few microeconomic assumptions. Additionally, evaluation of productivity at representative hypothetical units permits distribution-free analysis for the whole distribution of power plant sizes. The proposed framework is used to analyze a unique and rich dataset of coal, lignite, gas, and biomass-fired generators operating in Germany from 2003 to 2010. The results indicate stagnating productivity for the sector as a whole, technical progress for biomass plants, and very high productivity for gas-fired plants.

Keywords: Productivity estimation; Metafrontier Malmquist Decomposition; Stochastic Non-Smooth Envelopment of Data (StoNED); Electricity and Heat Generation in Germany; 2003 - 2010 (search for similar items in EconPapers)
JEL-codes: C14 D24 L94 O13 (search for similar items in EconPapers)
Pages: 44 p.
Date: 2015
New Economics Papers: this item is included in nep-eff and nep-ene
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Citations: View citations in EconPapers (1)

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