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Technical efficiency of electric companies in sub-saharan africa

Author

Listed:
  • Alastaire Sèna Alinsato

    (Université d''Abomey-Calavi)

  • Franck Nkeudjoua

    (Université d''Abomey-Calavi)

  • Boris Houenou

    (Viasat Inc and School of Economic Sciences, Washington State University)

Abstract

This article focuses on the technical efficiency of Africa electric companies. A measurement of productive efficiency is obtained by econometrically estimating an output distance function using a stochastic frontier analysis from a panel of African electric companies, using data from 2008 to 2017. The study shows that countries with incentive pricing have technically more efficient electric companies than other countries. This result puts more in perspective the incentive instruments stemming from Laffont and Tirole's theory of incentives and contracts and guides the regulatory authorities in the electricity sector on the scope of the various levers that encourage the technical efficiency of electric companies. However, the reach of its incentive mechanisms depends on an enabling institutional environment.

Suggested Citation

  • Alastaire Sèna Alinsato & Franck Nkeudjoua & Boris Houenou, 2021. "Technical efficiency of electric companies in sub-saharan africa," Economics Bulletin, AccessEcon, vol. 41(4), pages 2601-2611.
    • Handle: RePEc:ebl:ecbull:eb-21-00205
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    File URL: http://www.accessecon.com/Pubs/EB/2021/Volume41/EB-21-V41-I4-P225.pdf
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    More about this item

    Keywords

    Technical efficiency - electricity pricing - stochastic frontier analysis - incentive regulation- output distance function;

    JEL classification:

    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • D2 - Microeconomics - - Production and Organizations

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