No abstract

Against the background of remunicipalisation trends in European public service sectors, this paper estimates firm‐level productivity for German electricity retailers and tests whether the ownership type has a significant impact on productivity. We specify a production function for the retail sector with labour and external services as main inputs, which is estimated using a control function approach. Employing a newly constructed dataset on German utilities by the German Federal Statistical Office for the years 2003‐12, we find that firm‐level productivity generally increased until 2008 but not afterwards. We do not find any evidence for ownership having an impact on productivity.

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractWe analyze the effects of an incentive based regulatory scheme with revenue caps on the investment behaviors and decisions of 109 electricity distribution companies operating in Germany in 2006-2012. We hypothesize that Germany's implementation of incentive regulation in 2009 has a negative impact on total investment, and that firms increase their investments in the base year. We build a model that controls for both firm-specific heterogeneity and ownership structure and test it with the German data. The results show that investments increase after incentive regulation, and that the institutional constraints used to determine the revenue caps influence the distribution companies' investment decisions. We also note that the investments increase in the base year when the rate base is determined for the following regulatory period. We conclude that a comprehensive assessment of Germany's electricity distribution companies' investment decisions and behaviors should account for firm specific heterogeneity. It should further include all institutional aspects of incentive regulation to design incentives that will foster investments in the region's energy networks.JEL-Classification: L94, L51, L98

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractWe analyze the effects of an incentive based regulatory scheme with revenue caps on the investment behaviors and decisions of 109 electricity distribution companies operating in Germany in 2006-2012. We hypothesize that Germany's implementation of incentive regulation in 2009 has a negative impact on total investment, and that firms increase their investments in the base year. We build a model that controls for both firm-specific heterogeneity and ownership structure and test it with the German data. The results show that investments increase after incentive regulation, and that the institutional constraints used to determine the revenue caps influence the distribution companies' investment decisions. We also note that the investments increase in the base year when the rate base is determined for the following regulatory period. We conclude that a comprehensive assessment of Germany's electricity distribution companies' investment decisions and behaviors should account for firm specific heterogeneity. It should further include all institutional aspects of incentive regulation to design incentives that will foster investments in the region's energy networks.JEL-Classification: L94, L51, L98

Revenue cap regulation is often combined with systematic benchmarking to reveal the managerial inefficiencies when regulating natural monopolies. One example is the European energy sector, where benchmarking is based on actual cost data, which are influenced by managerial inefficiency as well as operational heterogeneity. This paper demonstrates how a conditional nonparametric method, which allows comparison of firms operating under heterogeneous technologies, can be used to estimate managerial inefficiency. A dataset of 123 distribution firms in Norway is used to show aggregate and firm-specific effects of conditioning. We compare the models presently used by the Norwegian regulator to a suggested conditional model, thus providing a viable alternative to distinguish between managerial inefficiency and operational heterogeneity. The use of the conditional model in this regulatory context leads, first, to a decrease in aggregate efficient costs and, second, to a reallocation effect that affects the relative profitability of firms and relative customer prices, thus providing a fairer basis for setting revenue caps.

We empirically demonstrate a practical approach of efficiency evaluation with limited data availability in some regulated industries. We apply PCA-DEA for radial efficiency measurement to U.S. natural gas transmission companies in 2007. PCA-DEA reduces dimensions of the optimization problem while maintaining most of the variation in the original data. Our results suggest that the methodology reduces the probability of over-estimation of individual firm-specific performance.

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Dieser Beitrag ist mit Zustimmung des Rechteinhabers aufgrund einer (DFG-geförderten) Allianz-bzw. Nationallizenz frei zugänglich. -This publication is with permission of the rights owner freely accessible due to an Alliance licence and a national licence (funded by the DFG, German Research Foundation) respectively. Terms of use: Documents inOvercoming Data Limitations in Nonparametric Benchmarking: Applying PCA-DEA to Natural Gas Transmission Maria Nieswand, Astrid Cullmann, and Anne Neumann AbstractWe empirically demonstrate a practical approach of efficiency evaluation with limited data availability in some regulated industries. We apply PCA-DEA for radial efficiency measurement to U.S. natural gas transmission companies in 2007. PCA-DEA reduces dimensions of the optimization problem while maintaining most of the variation in the original data. Our results suggest that the methodology reduces the probability of over-estimation of individual firm-specific performance.