This note illustrates the potential impact of the specification of a convex production technology on establishing minimal costs compared to the use of a non-convex technology when benchmarking electricity distributors. This methodological reflection is mainly motivated by recent engineering literature providing evidence for non-convexities in electricity distribution. An empirical illustration using non-parametric specifications of technology illustrates this main point using a sample of Spanish electricity distribution firms earlier analysed in © 2008 The Authors Journal compilation © CIRIEC 2008.
|Journal||Annals of Public and Cooperative Economics|
|Publication status||Published - 1 Jun 2008|