Abstract:

Efficiency and productivity analysis is a standard part of the tool-box of electricity and gas network regulators. In this paper the data envelopment analysis approach to benchmarking the performance of electricity networks is applied to a group of regional networks which differ in the quality of supply measured by, for example, interruptions. We show that efficiency comparisons differ when quality of supply is allowed for. We extend the efficiency comparisons to construct quality-adjusted Malmquist productivity indices in a manner which can be employed in both intra-firm management review and in regulatory benchmarking.

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