Service Quality in Electricity Distribution in Brazil: A Malmquist Approach

26 Pages Posted: 28 Apr 2020

See all articles by alexandre marinho

alexandre marinho

affiliation not provided to SSRN

Marcelo Resende

Universidade Federal do Rio de Janeiro (UFRJ); CESifo (Center for Economic Studies and Ifo Institute)

Date Written: December 2019

Abstract

The paper undertakes a dynamic analysis for service quality in the electricity distribution in Brazil between 2010 and 2014 based on Malmquist indexes constructed upon Data Envelopment Analysis (DEA) distance functions. The motivation for the less usual consideration of efficiency frontiers for service quality, that does not rely on traditional inputs and outputs but rather on quality indicators, builds on previous static applications in the context of telecommunications. The analysis considers undesirable technical indicators for quality as inputs and desirable consumer satisfaction indicators for quality as outputs in the efficiency frontier analysis. The bootstrap‐corrected Malmquist indexes indicated service quality deterioration in 38.1 per cent, quality stagnation in 40.5 per cent and quality improvement only in 21.4 per cent of the cases. When one decomposes the Malmquist index, the evidence does not suggest relevant frontier shifts and indicates a dominant role for the catch‐up effect. Finally, Malmquist indexes are regressed against variables that may portray heterogeneities, such as firm size, service area, density, ownership and regional dummies in terms of a well‐known two‐stage procedure. The mostly weak significance results reinforce the plausibility of the initial analysis.

Keywords: Service quality, consumer satisfaction, electricity distribution, Brazil

JEL Classification: C61, L51, L94

Suggested Citation

marinho, alexandre and Resende, Marcelo, Service Quality in Electricity Distribution in Brazil: A Malmquist Approach (December 2019). Annals of Public and Cooperative Economics, Vol. 90, Issue 4, pp. 687-712, 2019, Available at SSRN: https://ssrn.com/abstract=3586877 or http://dx.doi.org/10.1111/apce.12241

Alexandre Marinho (Contact Author)

affiliation not provided to SSRN

Marcelo Resende

Universidade Federal do Rio de Janeiro (UFRJ) ( email )

Rua Sao Francisco Xavier, 524
Instituto de Economia
Rio de Janeiro RJ 21949
Brazil

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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