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Quality of Service, Efficiency and Scale in Network Industries: An analysis of European electricity distribution

Author

Listed:
  • Christian Growitsch

    (Halle Institute of Economic Research)

  • Tooraj Jamasb

    (Faculty of Economics, University of Cambridge)

  • Michael Pollitt

    (Judge Business School, University of Cambridge)

Abstract

Quality of service (QoS) is of major economic significance in natural monopoly infrastructure industries. In this article, we present an efficiency analysis of electricity distribution networks from seven European countries. We apply the stochastic frontier analysis method to multi-output translog input distance function models to estimate cost efficiency and scale economies. We show that introducing the quality dimension into the analysis affects estimated efficiency significantly, especially that smaller utilities' efficiency seems to decrease. Our results emphasize that QoS should be an integrated part of efficiency and economic analysis of regulated natural monopolies.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Christian Growitsch & Tooraj Jamasb & Michael Pollitt, 2005. "Quality of Service, Efficiency and Scale in Network Industries: An analysis of European electricity distribution," Working Papers EPRG 0504, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    • Handle: RePEc:enp:wpaper:eprg0504
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    More about this item

    Keywords

    efficiency; quality of service; scale economies; input distance function; stochastic frontier analysis.;
    All these keywords.

    JEL classification:

    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

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