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Permanent URL to this publication: http://dx.doi.org/10.5167/uzh-51848

Filippini, Massimo; Wild, Jörg (1998). The Estimation of an Average Cost Frontier to Calculate Benchmark Tariffs for Electricity Distribution. Working paper series / Socioeconomic Institute No. 9803, University of Zurich.

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Abstract

In this paper we have examined the scale and cost inefficiency of a sample of Swiss electricity distribution utilities. To do so, we have considered estimation of a stochastic frontier average cost model using the approach suggested by Schmidt and Sickles (1984) for panel data. A translog cost function was estimated using panel data for a sample of 30 municipal utilities over the period 1992-1996. The results indicate the existence of economies of output and customer density and economies of scale. Moreover, the findings on cost inefficiency show that a majority of the distribution utilities is not producing at the minimum level of the cost and that a possible application of the frontier methodology employed in this paper relates to the regulation and benchmarking of the delivery rates.

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Additional indexing

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > Department of Economics
Working Paper Series > Socioeconomic Institute (former)
DDC:330 Economics
JEL Classification:Q41
Language:English
Date:September 1998
Deposited On:29 Nov 2011 19:45
Last Modified:09 Jul 2012 05:01
Series Name:Working paper series / Socioeconomic Institute
Official URL:http://www.econ.uzh.ch/wp.html

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