Is Productivity Growth in Electricity Distribution Negative? An Empirical Analysis Using Ontario Data

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Date: Mar. 2017
From: The Energy Journal(Vol. 38, Issue 2)
Publisher: International Association for Energy Economics
Document Type: Author abstract
Length: 9,681 words
Lexile Measure: 1500L

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Abstract :

Electricity industries are experiencing upward cost pressures in many parts of the world. This paper focuses on productivity trends in electricity distribution. We apply two methodologies for estimating productivity growth--an index based approach, and an econometric cost based approach--to data on 73 Ontario distributors for the period 2002 to 2012. The resulting productivity growth estimates are approximately -1% per year, suggesting a reversal of the positive estimates that have generally been reported in previous periods. We implement flexible semi-parametric specifications to assess the robustness of these conclusions and discuss the use of such statistical analyses for calibrating productivity and relative efficiency within a price-cap framework. Keywords: Productivity, TFP, Electricity distribution, Semiparametric, Cost function estimation, Scale economies

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Gale Document Number: GALE|A563359496