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Relative Performance of U.S. and Japanese Electricity Distribution: An Application of Stochastic Frontier Analysis

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  • Toru Hattori

Abstract

This paper estimates and compares the technical efficiency of the U.S. and Japanese electric utilities during the period 1982–1997 using a stochastic frontier analysis. Our focus is on electricity distribution services of major investor-owned utilities. We employ translog input distance functions to represent the technology of electricity distribution. Empirical results show that after controlling for environmental variables, on average, the Japanese electric utilities are more efficient. It is shown, however, that some U.S. utilities are as efficient as the most efficient Japanese utilities, indicating that the estimated frontier is not necessarily dominated by Japanese utilities. Copyright Kluwer Academic Publishers 2002

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  • Toru Hattori, 2002. "Relative Performance of U.S. and Japanese Electricity Distribution: An Application of Stochastic Frontier Analysis," Journal of Productivity Analysis, Springer, vol. 18(3), pages 269-284, November.
    • Handle: RePEc:kap:jproda:v:18:y:2002:i:3:p:269-284
    DOI: 10.1023/A:1020695709797
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