Measuring the Efficiency of the Electricity Generating Sector Using a Stochastic Frontier Model

5 Pages Posted: 4 Dec 2006

See all articles by Julio E. Villarreal

Julio E. Villarreal

Universidad de los Andes, Colombia

Oscar Javier Martinez

University of the Andes (Colombia)

Date Written: November 2006

Abstract

This article provides a detailed analysis on the efficiency of the Colombian electricity generating sector during the period between the years of 2002 and 2005 using a stochastic frontier model. This model can be used to provide empirical evidence on the efficiency of the generating sector, thermal units in particular, given the critical cost variables such as variable and input costs as well as the installed capacity. It should be noted that thermal generating capacity accounts for over 30% of the total installed capacity in Colombia and plays a crucial role in assuring the system's reliability under critical conditions.

Keywords: Stochastic frontier, efficiency, thermal plants

JEL Classification: C23, C33, C44, C51, L94

Suggested Citation

Villarreal, Julio E. and Martinez, Oscar Javier, Measuring the Efficiency of the Electricity Generating Sector Using a Stochastic Frontier Model (November 2006). Available at SSRN: https://ssrn.com/abstract=948681 or http://dx.doi.org/10.2139/ssrn.948681

Julio E. Villarreal (Contact Author)

Universidad de los Andes, Colombia ( email )

Carrera Primera # 18A-12
Bogota, DC D.C. 110311
Colombia

Oscar Javier Martinez

University of the Andes (Colombia) ( email )

Carrera Primera # 18A-12
Bogota, DC D.C. 110311
Colombia

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