A primer on efficiency measurement for utilities and transport regulators

Abstract

The World Bank Institute was established by the World 13an!; in 1955 to train oificials coineern.cd with development planning, policymaking. nsestnient analysis, and project implemcntation In member developing countries At present the substance of WBI's ssork cnmphaslzes macroeconomic and sectoral policy analysis. Through a variety of courses, scmin.rs., sorkshops. and other learninp activities, most of which are given overseas in coopcration witl localinstitutions. NWBI sceks tosharpin analytical skills used in policy analysis and to broaden undcrstandtiri (if the CxpCriciCee Of 1ndis Id&L! countries with economic and social developmnmt. Although WRi's publitatioIs aue designed to support its training activities, many are of interest to a much broader audience This report has been prepared by the staff of thc World Bantk The judgments cxpresscd di niLt necessarily rcflect the views of the Board of Executivc Dircc.or, or ortthe goxernments they represent The material in this publication is copyrighted The World Bi,nl CnLouraocs disseinnation ot ts work and will normally grant permission promptly. Permission to photocopy items for intemal or personal use I or th minternal or personal usc ot spectCtL clients, or for educational classroom use is granted by the Wotd Ban!,, provided that the appropriatc fee is paid directly to the Copyright Clearance ('enter, Inc ,2'2 Roscs otid Dn%e, Danters., MA 01 923, U S A., telephone 978-75t)-8400, fax 978-750 "70) t'leasc contact thei Cop) rihlit Clearance CentLr beforc photocopying items For permission to reprint individual articles or LhdpterS. please fax 3our request with comprL'2 information to the Republication Department, Copyright Clcarancc ('enitr, tax 978-750-4470 All other queries on rights and licenses shouli' h. addres.Ld to the World Bank at the address Ubos or faxed to 202-522-2422 The backlist of publications by the World Ban! is shosso in mthe amiual h,iden of PithlIi otio.Js whizh

Cash Flow Valuation in an Inflationary World: The Case of World Bank for Regulated Firms

“…We agree with, Coello, et al (2003) when they say: "In reality, a firm will base its investment decisions on expected prices, which may or may not be realized, and thus an investment that is optimal ex ante can appear to be suboptimal ex post". The proper methodology for valuation is nominal or current prices.…”

Benchmarking Central American water utilities

“…A substantial body of technical literature exists regarding how to measure performance. Coelli et al (2003) present a survey of different methodologies to measure performance. The methodologies considered in this study are performance indicators, total factor productivity indexes, and frontiers.…”

Regulation of State-Owned and Privatized Utilities: Ukraine Electricity Distribution Company Performance*

“…Coelli et al (2002) note that typical quality measures in developed countries include average length of supply interruption per customer per year, delays, waiting times for service connections, and average time to restore supply after interruptions. Incorporating quality into the present analysis would require a more comprehensive data collection effort, but future research should certainly explore whether service quality might alter the conclusions of this study by affecting performance comparisons.…”

“…Battese and Coelli （1995) proposed timevariant models to deal with the panel data in the SFA. However, as Coelli et al (2002) point out, the time-varying efficiency model restricts the technical efficiency of all firms to follow the same trend direction. However, it is unlikely that efficiency is either increasing over time or decreasing over time for each of the firms in the Ukraine.…”

“…However, it is unlikely that efficiency is either increasing over time or decreasing over time for each of the firms in the Ukraine. Following Coelli et al (2002) Wald chis(4)=20797.4…”