Technical efficiency of electricity distributors in Brazil during 2003-2012: an application of stochastic distance functions

Abstract

The efficiency of operational and capital costs of Brazilian electricity distribution companies in the period 2003-2012 is estimated in this paper by using stochastic distance functions with panel data models and controlling for heteroscedasticity. Additionally to including stochastic effects, the estimates of the study are controlled by the effect of exogenous variables that resulted statistically significant. The study concludes that the efficiency of the industry increased in the period and the effects of non-managerial variables such as regional differences in the price of labor, the concentration of consumers and socio-economic environment in which companies operate should be considered in the analysis.