Losing to Blackouts: Evidence from Firm Level Data

Gurara, Daniel; Tessema, Dawit

doi:10.5089/9781484363973.001

Cited by 3 publications

(2 citation statements)

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“…The approach involved identifying the critical predictors of customer complaints and leveraging them to develop a predictive model. Gurara and Tessema analyzed the impact of blackouts on firms using firm-level data [7]. The authors developed a model to estimate the impact of blackouts on firm-level productivity and profitability in different sectors.…”

Section: Model-based Methodsmentioning

confidence: 99%

Fault Diagnosis Algorithm Based on Power Outage Data in Power Grid

Wang,

Yuan,

Gao

et al. 2023

EAI Endorsed Trans Energy Web

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INTRODUCTION: With the rapid development of the power industry, the power system has become more and more complex and prone to failures, which seriously impacts power supply and safety. OBJECTIVES: Development of efficient and accurate fault diagnosis algorithms for power systems. METHODS:Proposes a fault diagnosis algorithm based on outage data to construct an outage fault prediction model using accurate data. First, the outage data are collected, pre-processed, feature extracted and reduced to obtain a more efficient data set. Then, an optimized fault diagnosis algorithm is designed based on logit, support vector machine (SVM) and decision tree (DT) to improve the accuracy and efficiency of fault diagnosis. RESULTS: The method is applied to the natural power system, and the results show that the optimization algorithm outperforms the traditional methods. Specifically, the accuracy of the optimization algorithm can reach 100%, while the accuracy of the traditional logit algorithm and SVM algorithm is only 84% and 93%, which is a significant improvement in the model prediction performance. CONCLUSION: The author can significantly optimize the performance of its model and construct an outage data mining algorithm with a good predictive ability to achieve grid fault research and judgment, which has a specific application value in the practical field.

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Section: Model-based Methodsmentioning

confidence: 99%

Fault Diagnosis Algorithm Based on Power Outage Data in Power Grid

Wang,

Yuan,

Gao

et al. 2023

EAI Endorsed Trans Energy Web

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“…There is a literature that looks at supply disruptions and brief temporary shutdowns. For example, Gurara and Tessema () explores how the loss of access to electricity may lead to work stoppage. Such work stoppage is very different from the textbook temporary shutdown and would be impossible to detect without having weekly or even daily production data.…”

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confidence: 99%

The temporary shutdown decision: Lessons from the Great Recession

2019

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The temporary shutdown condition provides guidance on dealing with a serious transitory downturn in demand. The traditional condition says managers should stop production when revenues fall below avoidable costs. This condition is flawed because it ignores how lost human capital and reputational damage harm future profits. As a consequence, firms may optimally operate with losses far larger than stipulated by the traditional condition. We provide the first broad empirical analysis of the temporary shutdown decision, focusing on the Great Recession. We show that large operating losses were common and temporary shutdowns were exceedingly rare, even among very small public firms.So an industry may, and often does, keep tolerably active during a whole year or even more, in which very little is earned beyond prime costs, and the fixed plant has 'to work for nothing.' But when the price falls so low that it does not pay for the out of pocket expenses during the year for wages and raw materials, for coal and for lighting, etc., then the production is likely to come to a sharp stop." -Principles of Economics (Alfred Marshall, 1920, Book V, Chapter IX) 1 | INTRODUCTION The temporary shutdown condition is important for managerial decision making because it provides guidance on operations when firms suffer a serious downturn in demand. The traditional (neoclassical) shutdown condition is that firms should temporarily stop production when revenues do not cover avoidable costs. This condition dates back to Alfred Marshall's Principles of Economics and continues to appear in numerous textbooks covering managerial economics, industrial organization, and the theory of the firm. 1 If this condition is correct, the temporary shutdown option provides valuable insurance for the firm because it puts a relatively high lower bound on operating losses. If the traditional condition is not correct, however, firms may be forced to operate in spite of extremely high losses during downturns, jeopardizing their survival.Surprisingly, the broad literature on managerial strategy has given little consideration to the temporary shutdown decision. This lack of attention is notable given how extensively the literature has studied related issues, such as retrenchment strategies, corporate downsizing, and permanent exits. 2 Although it may be obvious that the neoclassical temporary shutdown condition is flawed, it is important to understand why it is flawed and consider whether an alternative framework can provide better insight on the temporary shutdown decision. Perhaps most importantly, the lack of empirical evidence on the temporary shutdown decision means that the extent to which the traditional condition fails is unknown. In particular, if temporary shutdowns are rarely undertaken, this has important implications for managing firms during severe downturns such as the Great Recession.There are several reasons why the neoclassical temporary shutdown condition likely provides poor guidance to managers of modern firms. For example, numerous studies...

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Power Outages, Firm Productivity, and Generator Ownership in East Africa

Kupzig

2022

Journal of African Business

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Losing to Blackouts: Evidence from Firm Level Data

Cited by 3 publications

References 20 publications

Fault Diagnosis Algorithm Based on Power Outage Data in Power Grid

Fault Diagnosis Algorithm Based on Power Outage Data in Power Grid

The temporary shutdown decision: Lessons from the Great Recession

Power Outages, Firm Productivity, and Generator Ownership in East Africa

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