241B Lecture Application: Returns to Scale in Electricity Markets We work from Nerlove (1963): a classic study of returns to scale in a regulated industry. The Electricity Supply Industry
نویسنده
چکیده
The Data Nerlove assembled a cross-section data set for 1955. The set contains 145 rms in 44 states. The variables are: total costs, factor prices (the wage rate, the price of fuel, the rental rate of capital) and output. Rental rate of capital: Although rms own capital (e.g. power plants), standard investment theory (Jorgenson 1963) tells us that (as long as there are no costs in changing the capital stock), the rm should behave as though it rents capital on a period-to-period basis from itself at a rental price (the user cost of capital)
منابع مشابه
Productivity Performance of The Iraninan Electric Power Industry
This paper is concerned with the estimation of total factor productivity (TFP) growth for the Iranian electric utilities during the period 1980-1993 on the basis of panel data. A translog cost function is used which accommodates firm - specific variability through a one - way error component model. The results show that the Iranian electricity supply industry experienced increasing returns to s...
متن کاملCost Efficiency Evaluation via Data Envelopment Analysis Approach for Undesirable Outputs based on the Weak Disposability Axiom (Case Study: 56 Electricity Producing Thermal Power Plants in Iran)
Cost efficiency evaluation is a very important and applicable issue in Data Envelopment Analysis (DEA). In this paper, the classical cost efficiency model in which all the input prices are known and fixed for each decision making unit is developed via undesirable outputs with the weak disposability axiom. The proposed model is a nonlinear model under the variable returns to scale condition,...
متن کاملAn input-oriented radial measure for returns to scale aggregation.
In production theory, it is necessary to be capable of predicting the production func- tion’s long-run behaviors. Hereof, returns to scale is a helpful concept. Returns to scale describes the reaction of a production function to the proportionally scaling all its input variables. In this regard, Data envelopment analysis (DEA) provides a com- prehensive framework for returns to scale evaluation...
متن کاملPerformance evaluation of Iranian electricity distribution units with stochastic Data Envelopment Analysis
Performance evaluation of electricity distribution units is an important issue between researchers and regulators. Classic Data Envelopment Analysis models with deterministic data have been used by many authors to measure efficiency of power distribution units in different countries. However, Data Envelopment Analysis with stochastic data are rarely used to measure efficiency of distribution co...
متن کاملEconomies of Scale and Technical Change in Electricity Production in Ireland
Knowledge of the structure of production in public-utility enterprises is of considerable economic importance. Such things as the nature and extent of returns to scale and returns to individual factor imputs, the degree of substitutability between inputs, and the extent of allocative inefficiency and X-inefficiency may have bearings on various issues at the plant, firm and industry levels. For ...
متن کاملذخیره در منابع من
با ذخیره ی این منبع در منابع من، دسترسی به آن را برای استفاده های بعدی آسان تر کنید
عنوان ژورنال:
دوره شماره
صفحات -
تاریخ انتشار 2009