SERVICE QUALITY IN ELECTRICITY DISTRIBUTION IN BRAZIL: A MALMQUIST APPROACH

Alexandre Marinho and Marcelo Resende ()

Annals of Public and Cooperative Economics, 2019, vol. 90, issue 4, 687-712

Abstract: The paper undertakes a dynamic analysis for service quality in the electricity distribution in Brazil between 2010 and 2014 based on Malmquist indexes constructed upon Data Envelopment Analysis (DEA) distance functions. The motivation for the less usual consideration of efficiency frontiers for service quality, that does not rely on traditional inputs and outputs but rather on quality indicators, builds on previous static applications in the context of telecommunications. The analysis considers undesirable technical indicators for quality as inputs and desirable consumer satisfaction indicators for quality as outputs in the efficiency frontier analysis. The bootstrap‐corrected Malmquist indexes indicated service quality deterioration in 38.1 per cent, quality stagnation in 40.5 per cent and quality improvement only in 21.4 per cent of the cases. When one decomposes the Malmquist index, the evidence does not suggest relevant frontier shifts and indicates a dominant role for the catch‐up effect. Finally, Malmquist indexes are regressed against variables that may portray heterogeneities, such as firm size, service area, density, ownership and regional dummies in terms of a well‐known two‐stage procedure. The mostly weak significance results reinforce the plausibility of the initial analysis.

Date: 2019
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https://doi.org/10.1111/apce.12241

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Working Paper: Service Quality in Electricity Distribution in Brazil: A Malmquist Approach (2016)
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