Cost Efficiency in the Swiss Gas Distribution Sector

Mehdi Farsi, Massimo Filippini and Michael Kuenzle ()
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Michael Kuenzle: Center for Energy Policy and Economics CEPE, Department of Management, Technology and Economics, ETH Zurich, Switzerland

No 04-36, CEPE Working paper series from CEPE Center for Energy Policy and Economics, ETH Zurich

Abstract: This paper studies the cost structure of gas distribution utilities in Switzerland. Three stochastic frontier models are applied to a panel of 26 companies operating from 1996 to 2000. Efficiency is assumed to be constant over time. The analysis highlights the importance of output characteristics such as customer density and network size. The results suggest that the utilities could slightly reduce their operating costs by improving efficiency. There is no evidence of significant unexploited scale economies. However, our analysis indicates that the estimates of scale economies could be sensitive to the assumptions regarding the variation of output with output characteristics.

Keywords: cost efficiency; scale economies, gas distribution, stochastic frontier analysis (search for similar items in EconPapers)
JEL-codes: L25 L95 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2004-10
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Cost efficiency in the Swiss gas distribution sector (2007)
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