Scale and cost efficiency in the Swiss electricity distribution industry: evidence from a frontier cost approach

Massimo Filippini, Jörg Wild and Michael Kuenzle
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Jörg Wild: Center for Energy Policy and Economics CEPE, Department of Management, Technology and Economics, ETH Zurich, Switzerland
Michael Kuenzle: Center for Energy Policy and Economics CEPE, Department of Management, Technology and Economics, ETH Zurich, Switzerlan

No 01-08, CEPE Working paper series from CEPE Center for Energy Policy and Economics, ETH Zurich

Abstract: The deregulation of the electricity industry is currently on the political agenda in many countries. In most countries, the deregulation of the sector is combined with a (re-) regulation of the electricity networks in most of the countries. In this paper, we analyze the costs structure of 59 Swiss electricity distribution network operators with respect to cost and scale efficiency of the industry. A stochastic frontier model is applied to estimate the average costs of efficient network operators as a benchmark for the industry. Moreover, the heterogeneity of service areas is taken into account. The Swiss authorities might use our results to regulate the prices for the access to the distribution networks.

Keywords: stochastic frontier analysis; electricity distribution; efficiency measurement; regulation; benchmarking; returns to scale; returns to density (search for similar items in EconPapers)
JEL-codes: L43 L94 R32 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2001-06
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

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