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Determinants of the Efficiency of Electricity Generation in Latin America and Caribbean Countries Using a Cragg’s Regression Model

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  • Sebastian Cuadros

    (Financial and Accounting Department, ICESI University, Cali 760031, Colombia)

  • Yeny E. Rodríguez

    (School of Management, Universidad de los Andes, Bogotá 111711, Colombia)

  • Javier Contreras

    (E.T.S. de Ingeniería Industrial, University of Castilla-La Mancha, 13071 Ciudad Real, Spain)

Abstract

Measuring and understanding the evolution of the electricity generation efficiency sector is a relevant task for policymakers. This study focuses on assessing the determinants of electricity generation efficiency across 24 countries in Latin America and the Caribbean between 2000 and 2020. A hurdle model was employed to account for the censored nature of the dependent variable. The findings show a positive impact of opening up the electricity sector in fully efficient countries. Market liberalization and the involvement of privately owned power plants contribute to efficiency gains in inefficient countries. Additionally, the tariff protectionism level exhibits positive effects for completely efficient and inefficient countries. These results provide valuable insights, as less-efficient countries can glean strategies from their more efficient counterparts to enhance their electricity generation efficiency.

Suggested Citation

  • Sebastian Cuadros & Yeny E. Rodríguez & Javier Contreras, 2023. "Determinants of the Efficiency of Electricity Generation in Latin America and Caribbean Countries Using a Cragg’s Regression Model," Energies, MDPI, vol. 16(23), pages 1-18, December.
    • Handle: RePEc:gam:jeners:v:16:y:2023:i:23:p:7875-:d:1292468
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    References listed on IDEAS

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