Does regulation induce cost efficiency in electricity distribution utilities? Use of stochastic cost frontier analysis for the Indian states

2021 ◽  
pp. 178359172110294
Author(s):  
Amit Nandan ◽  
Hrushikesh Mallick
Keyword(s):  
Public Sector ◽  
Cost Efficiency ◽  
The State ◽  
Electricity Distribution ◽  
State Governments ◽  
Power Sector ◽  
Indian States ◽  
Stochastic Cost Frontier ◽  
Cost Frontier ◽  
The Cost

To overcome the macroeconomic crisis of the early 1990s, the Government of India persuaded the state governments to adopt market-oriented reforms for loss-making state public sector undertakings in general and power sector utilities in particular with an aim to limit the overall size of the public sector. This led the state governments to undertake unbundling of their vertically integrated State Electricity Boards (SEBs), establish independent regulatory bodies in the form of State Electricity Regulatory Commissions (SERCs) to regulate the power sector, and allow for an active participation of private sector. Given this backdrop, the present study attempts to examine the effect of establishment of SERCs on the cost-efficiency of electricity distribution in the Indian states. Thereby, it evaluates whether the establishment of SERCs has induced efficiency gains in the electricity distribution. Estimating a Cobb-Douglas stochastic cost frontier function, it finds that the establishment of independent regulators in various states has resulted in significant improvements in the cost-efficiency in the electricity distribution.

scholarly journals The Cost Efficiency of the Brazilian Electricity Distribution Utilities: A Comparison of Bayesian SFA and DEA Models

2010 ◽  
Vol 2010 ◽  
pp. 1-20 ◽  
Author(s):  
Marcus Vinicius Pereira de Souza ◽  
Madiagne Diallo ◽  
Reinaldo Castro Souza ◽  
Tara Keshar Nanda Baidya
Keyword(s):  
Cost Efficiency ◽  
Stochastic Frontier Analysis ◽  
Stochastic Frontier ◽  
Fundamental Aspect ◽  
Data Envelopment ◽  
Electricity Distribution ◽  
Frontier Analysis ◽  
Dea Models ◽  
The Cost ◽  
Analysis Models

The purpose of this study is to evaluate the efficiency indices for 60 Brazilian electricity distribution utilities. These scores are obtained by DEA (Data Envelopment Analysis) and Bayesian Stochastic Frontier Analysis models, two techniques that can reduce the information asymmetry and improve the regulator's skill to compare the performance of the utilities, a fundamental aspect in incentive regulation schemes. In addition, this paper also addresses the problem of identifying outliers and influential observations in deterministic nonparametric DEA models.

scholarly journals The Effect of Governance Forms on North American Airport Efficiency: A Comparative Analysis of Airport Authority vs. Government Branch

2014 ◽  
Author(s):  
Qi (Mia) Zhao ◽  
Yap Yin Choo ◽  
Tae Hoon Oum
Keyword(s):  
United States ◽  
Comparative Analysis ◽  
Technical Efficiency ◽  
Cost Efficiency ◽  
The United States ◽  
Stochastic Cost Frontier ◽  
Labor Share ◽  
Cost Frontier ◽  
Significant Difference ◽  
Efficiency Performance

This paper applies a stochastic cost frontier model to a panel of 54 major airports over 2002-2008 to examine how the two dominant governance forms of publicly owned airports in the United States and Canada, namely, operation and governance by a government (city, county, or state) branch, or by an airport authority, affect airport efficiency performance. Our key findings are (a) airports operated by an airport authority achieve higher cost efficiency (on average, 14% higher technical efficiency) than those operated by a government branch; (b) airports operated by a government branch have lower labor share than those operated by an airport authority; and (c) there is no statistically significant difference in the efficiency performance between airports operated by U.S. airport authorities and Canadian airport authorities.

Towards a Theory of Taxation

1984 ◽  
Vol 2 (1) ◽  
pp. 161-173
Author(s):  
J. R. Lucas
Keyword(s):  
United States ◽  
New York ◽  
Federal Government ◽  
Multinational Corporations ◽  
District Of Columbia ◽  
The United States ◽  
The State ◽  
State Governments ◽  
The Cost ◽  
George Iii

“Towards a Theory of Taxation” is a proper theme for an Englishman to take when giving a paper in America. After all it was from the absence of such a theory that the United States derived its existence. The Colonists felt strongly that there should be no taxation without representation, and George III was unable to explain to them convincingly why they should contribute to the cost of their defense. Since that time, understanding has not advanced much. In Britain we still maintain the fiction that taxes are a voluntary gift to the Crown, and taxing statutes are given the Royal Assent with the special formula, “La Reine remercie ses bons sujets, accepte leur benevolence, et ainsi le veult” instead of the simple “La Reine le veult,” and in the United States taxes have regularly been levied on residents of the District of Columbia who until recently had no representation in Congress, and by the State of New York on those who worked but did not reside in the State, and so did not have a vote. Taxes are regularly levied, in America as elsewhere, on those who have no say on whether they should be levied or how they should be spent. I am taxed by the Federal Government on my American earnings and by state governments on my American spending, but I should be hard put to it to make out that it was unjust. Florida is wondering whether to follow California in taxing multinational corporations on their world-wide earnings.

Public Sector Performance and Efficiency Assessment of Indian States

2019 ◽  
pp. 097215091986266 ◽  
Author(s):  
Anup Kumar Yadava ◽  
Yadawananda Neog
Keyword(s):  
Public Sector ◽  
Structural Changes ◽  
Public Spending ◽  
State Governments ◽  
Indian States ◽  
Public Sector Performance ◽  
Dea Models ◽  
Dea Analysis ◽  
Sector Performance ◽  
Using Data

The purpose of this paper to analyze public spending of 19 Indian states on the basis of their performance. We have computed Public Sector Performance (PSP) scores with their representative sub-indicators for the period of 2006-2015. Total 10 years of data have taken of these sub-indicators to capture the structural changes in the economy. This PSP score is divided into two parts namely, PSP Opportunity and PSP Musgravian. Both the PSPs have their own representative variables and the total PSP scores are the composite average of these indicators. Based on these PSPs scores we have computed states efficiency using Data Envelopment Analysis (DEA) and ranked the states according to their efficiency. We applied three DEA models with consideration of State Total Revenue Expenditure (TRE) as an input variable, further we have considered PSP Opportunity, PSP Musgravian and Total PSP scores as output variables in these models. The input-oriented DEA analysis reveals that states should have decreased public spending by 57.88%. The output-oriented DEA models conclude that state governments would have potential to increase the efficiency by 14.16% without compromising public spending. Various policy suggestions also discussed by incorporating empirical findings at last section of this paper.

scholarly journals Exit/Entry, Voice/Noise, and Loyalty/Apathy in the era of social media

2020 ◽  
Vol 338 ◽  
pp. 417-429
Author(s):  
Hiroko Kudo
Keyword(s):  
Social Media ◽  
Public Sector ◽  
Public Life ◽  
The State ◽  
Virtual Network ◽  
Communication Tools ◽  
Entry Cost ◽  
The Social ◽  
Use Of Social Media ◽  
The Cost

Use of Social Media in public life has changed the way how citizens relate to public sector. Modern communication tools, in particular Social Media, have made citizens easier to use their “voice” to mobilize. When citizens can easily mobilize, the cost of mobilization is low for them, while its impact can lead to a larger cost for the State. As the exit/entry cost of Social Media is very low or almost nothing, a virtual network has been substituting institutions, causing new issues to the State. This leads to the issue of loyalty: citizens now feel that they do not need institution like the State to belong to, as many networks substitute its function. This paper analyses the Social Media use by citizens and its impact on public sector through Albert Hirschman’s classis “Exit, Voice, and Loyalty” and tries to address new aspects.

Aligning Quality Incentives and Tariff Adjustments: The Case of the Brazilian Electricity Distribution Sector

2019 ◽  
Vol 18 (1) ◽  
pp. 35-62
Author(s):  
Maria Luisa Corton ◽  
Michelle Andrea Phillips ◽  
Aneliese Zimmermann
Keyword(s):  
Regulatory Regime ◽  
Electricity Distribution ◽  
High Quality ◽  
Stochastic Cost Frontier ◽  
Cost Frontier ◽  
Cost Behavior ◽  
Distribution Sector ◽  
Set Up ◽  
Improve Service Quality

Abstract This study investigates the role of aligning tariff adjustments and quality incentives in a Price cap regulatory regime. According to theory costs and quality are positively related. If additional resources are needed to improve service quality, a high cost high quality utility could be at a disadvantage when tariffs are adjusted by an X-factor that does not include quality. The regulator of the electricity distribution sector of Brazil has set up a public ranking of utilities according to quality compliance at the same time that a quality component is added to the X-factor, in 2013. We develop a stochastic cost frontier integrating all components of the X-factor to rank the utilities based on this integrated efficiency. Comparing this rank with the regulator’s public rank we argue that the resulting differences highlight the importance of using the same factors to rank and adjust tariffs in the sector. Otherwise, incentives would be misplaced with respect to factors used in cost adjustments. In addition, our findings reveal that the utilities’ cost behavior with respect to quality depends on the volume of energy delivered. We believe these results could be considered by the regulator when setting incentives and considering factors to adjust tariffs.

scholarly journals Is Human Capital Related to Voluntary Turnover in U.S. State Governments? Evidence from the State of Oklahoma

2020 ◽  
Vol 6 (1) ◽  
pp. 37
Author(s):  
Andrew Wesemann
Keyword(s):  
Human Capital ◽  
Public Sector ◽  
Private Sector ◽  
Empirical Evidence ◽  
State Government ◽  
Capital Stock ◽  
Voluntary Turnover ◽  
The State ◽  
State Governments ◽  
Public Sector Organizations

Building and retaining human capital stock is critical for organizational success and survival. These two practices, however, may inadvertently be at odds with one another. That is, as organizations seek to increase their human capital stock, through both internal and external strategies, they may also unintentionally increase their risk of voluntary turnover. Research has found support for this relationship in the private sector, yet empirical evidence for such a correlation among public sector organizations is nonexistent. This article, therefore, contributes to the understanding of whether the postulated relationship between human capital and voluntary turnover is generalizable to public sector entities, specifically focusing on U.S. state government. Using longitudinal workforce data from the State of Oklahoma, results of econometric analysis demonstrate that this organizational phenomenon transcends sector boundaries.

Sign in / Sign up

Export Citation Format

Share Document