EconPapers    
Economics at your fingertips  
 

On the sensitivity of US electric utilities' efficiency estimates - a distance function approach

Christian Growitsch () and Borge Hess ()

Applied Economics Letters, 2009, vol. 16, issue 8, 847-851

Abstract: Previous applications of different benchmarking techniques, both in academia and regulation practice, have shown substantial differences among the models' results. To analyse the sensitivity of efficiency estimates of a sample of US electricity distribution utilities, we compare the results of the generalized least squares frontier model proposed by Schmidt and Sickles (1984) and the maximum likelihood estimation frontier model of Pitt and Lee (1981) with the true random effects frontier model introduced by Greene (2004, 2005). We find substantially higher efficiency scores for the Greene model, indicating that the other formulations underestimate firms' efficiency due to an insufficient consideration of firm specific heterogeneity. In contrast to other studies, the efficiency estimates in this article do not differ considerably.

Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed

Downloads: (external link)
http://www.informaworld.com/openurl?genre=article& ... 40C6AD35DC6213A474B5 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:apeclt:v:16:y:2009:i:8:p:847-851

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAEL20

Access Statistics for this article

Applied Economics Letters is currently edited by Anita Phillips

More articles in Applied Economics Letters from Taylor & Francis Journals
Series data maintained by Chris Longhurst ().

 
Page updated 2018-03-25
Handle: RePEc:taf:apeclt:v:16:y:2009:i:8:p:847-851