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Estimating The Cost of Improving Quality in Electricity Distribution: A Parametric Distance Function Approach ; Gautier, Axel ; Perelman, Sergio et al in Energy Policy (2013), 53 The quality of electricity distribution is being more and more scrutinized by regulatory authorities, with explicit reward and penalty schemes based on quality targets having been introduced in many ... [more ▼] The quality of electricity distribution is being more and more scrutinized by regulatory authorities, with explicit reward and penalty schemes based on quality targets having been introduced in many countries (France, Germany, Italy, UK,...). It is then of prime importance to know the cost of improving the quality for a distribution system operator. In this paper, we focus on one dimension of quality, the continuity of supply, and we estimated the cost of preventing power outages. For that, we make use of the parametric distance function approach, assuming that outages enter in the firm production set as an input, an imperfect substitute for maintenance activities and capital investment. This allows us to identify the sources of technical inefficiency and the underlying trade-‐off faced by operators between quality and other inputs and costs. For this purpose, we use panel data on 92 electricity distribution units operated by ERDF (Electricité de France - Réseau Distribution) in the 2003–2005 financial years. Assuming a multi-output multi-input translog technology, we estimate that the cost of preventing one interruption varies substantily among the distribution units from 2.7 € to 15.7 €. Furthermore, as one would expect, marginal quality improvements tend to be more expensive as quality itself improves. [less ▲] Detailed reference viewed: 172 (34 ULg)Integration of quality indices of distribution in benchmarking analysis ; Gautier, Axel ; Perelman, Sergio et al Report (2011) Detailed reference viewed: 18 (7 ULg)Integration of quality indices of distribution in benchmarking analysis ; Gautier, Axel ; Perelman, Sergio et al Report (2011) Detailed reference viewed: 11 (1 ULg)On the Convergence of Social Protection Performance in the European Union Lefebvre, Mathieu ; ; Pestieau, Pierre in CESifo Economic Studies (2010), 56(2), 300-322 In this article, we use data on five social inclusion indicators (poverty, inequality, unemployment, <br />education and health) to assess and compare the performance of 15 European <br />welfare states ... [more ▼] In this article, we use data on five social inclusion indicators (poverty, inequality, unemployment, <br />education and health) to assess and compare the performance of 15 European <br />welfare states (EU15) over a 12-year period from 1995 to 2006. Aggregate measures of <br />performance are obtained using index number methods similar to those employed in the <br />construction of the widely used Human Development Index. These are compared with <br />alternative measures derived from data envelopment analysis methods. The influence of <br />methodology choice and the assumptions made in scaling indicators upon the results <br />obtained is illustrated and discussed. We then analyse the evolution of performance <br />over time, finding evidence of some convergence in performance and no sign of social <br />dumping. [less ▲] Detailed reference viewed: 39 (8 ULg)CAP Reforms and Total Factor Productivity Growth: An Analysis of Belgian Farm-level Data ; ; Perelman, Sergio Report (2008) Have the 1992 and 2000 CAP reforms had any discernable effect upon agricultural productivity? In this study we derive detailed information on the total factor productivity (TFP) growth of arable farms in ... [more ▼] Have the 1992 and 2000 CAP reforms had any discernable effect upon agricultural productivity? In this study we derive detailed information on the total factor productivity (TFP) growth of arable farms in Belgium over a 16-year period from 1987 to 2002. Calculations are based on a carefully constructed high-quality detailed farm-level data set containing 1728 observations, involving over 100 farms in most years. Three output variables (cereals, other crops, other outputs) and four input variables (land, labour, capital and other inputs) are constructed, using multilateral Fisher index numbers where crop aggregation is required. The TFP measures are calculated using a Malmquist TFP index relative to a series of data envelopment analysis (DEA) frontiers. Annual average TFP change of 1.0% per year is estimated for this industry. This rate does not compare well with rates of over 2% that are commonly reported in studies involving other developed countries. The pattern of TFP growth over the period indicates that the two CAP reforms (in 1992 and 2000) have had no discernable effect upon TFP trends. An inspection of shadow shares (derived from the DEA frontiers) indicates that substantial distortions remain in this industry, especially with regards to the excess use of labour and constrained use of land, relative to other inputs. Finally, tabulation of results by region and farm size shows fairly uniform TFP change across regions, but poor performance in small farms, where TFP actually levels actually fell over this period. [less ▲] Detailed reference viewed: 79 (3 ULg)Incorporating quality of service in a benchmarking model:an application to French electricity distribution operators ; ; et al Report (2007) In this paper we use annual data on 92 French electricity distribution units (2003-2005) to estimate a benchmarking model that includes a quality of service indicator (number of interruptions). Our ... [more ▼] In this paper we use annual data on 92 French electricity distribution units (2003-2005) to estimate a benchmarking model that includes a quality of service indicator (number of interruptions). Our methodology involves the estimation of input distance functions using stochastic frontier analysis (SFA) and data envelopment analysis (DEA) techniques. The empirical results indicate that the inclusion of the quality variable has no significant effect upon mean technical efficiency scores, and the mean shadow price of one interruption is approximately ten Euros. The analysis in this paper is the first preliminary step in a larger project which is investigating the feasibility of including quality measures into benchmarking models that are often used by regulatory authorities [less ▲] Detailed reference viewed: 43 (2 ULg)Una introducción a las medidas de eficiencia para reguladores de servicios públicos y de transporte ; ; Perelman, Sergio et al Book published by Alfaomega (2003) Detailed reference viewed: 341 (3 ULg)Capacity utilisation and profitability: A decomposition of short-run profit efficiency ; ; Perelman, Sergio in International Journal of Production Economics (2002), 79 The principal aim of this paper is to measure the amount by which the profit of a multi-input, multi-output firm deviates from maximum short-run profit, and then to decompose this profit gap into ... [more ▼] The principal aim of this paper is to measure the amount by which the profit of a multi-input, multi-output firm deviates from maximum short-run profit, and then to decompose this profit gap into components that are of practical use to managers. In particular, our interest is in the measurement of the contribution of unused capacity, along with measures of technical inefficiency, and allocative inefficiency, in this profit gap. We survey existing definitions of capacity and, after discussing their shortcomings, we propose a new ray economic capacity measure that involves shortrun profit maximisation, with the output mix held constant. We go on to describe how the gap between observed profit and maximum profit can be calculated and decomposed using linear programming methods. The paper concludes with an empirical illustration, involving data on 28 international airline companies. The empirical results indicate that these airline companies achieve profit levels which are on average US$815m below potential levels, and that 70% of the gap may be attributed to unused capacity. [less ▲] Detailed reference viewed: 26 (4 ULg)Efficiency measurement, multiple-output technologies and distance functions: with application to European Railways ; Perelman, Sergio in Applied Economics (2000), (32), 1967-1976 The single-output production function has long been regarded as one of the principle limitations of the econometric approach to technical efficiency measurement. If one wished to investigate efficiency in ... [more ▼] The single-output production function has long been regarded as one of the principle limitations of the econometric approach to technical efficiency measurement. If one wished to investigate efficiency in a multiple-output industry using econometric methods one would usually either: (a) aggregate outputs into a single index of output (e.g., total revenue or a multilateral Tornqvist output index); or (b) attempt to model the technology using a dual cost function. The first of these methods require that output prices be observable (and reflect revenue maximising behaviour), while the latter approach requires an assumption of cost-minimising behaviour. There are a number of instances, however, when neither of these requirements are met (the public sector contains many examples). In this study we outline the recently developed distance function solution to the multi-output problem. The method is illustrated using data on European railways. Output-orientated, input-orientated and constant returns to scale distance functions are estimated using corrected ordinary least squares. The distance function estimates are also compared with production function estimates involving aggregate output measures. These comparisons indicate that, for the case of European railways, a production function involving a multilateral Tornqvist output index exhibits substantially less aggregation bias relative to a production function that uses total revenue as a measure of aggregate output. [less ▲] Detailed reference viewed: 85 (1 ULg)Technical efficiency of European railways: a distance function approach ; Perelman, Sergio in Applied Economics (2000), 32 This study has two principal objectives. The first objective is to measure and compare the performance of European railways. The second objective is to illustrate the usefulness of econometric distance ... [more ▼] This study has two principal objectives. The first objective is to measure and compare the performance of European railways. The second objective is to illustrate the usefulness of econometric distance functions in the analysis of production in multioutput industries, where behavioural assumptions such as cost minimization or profit maximization, are unlikely to be applicable. Using annual data on 17 railways companies during 1988± 1993, multioutput distance functions are estimated using corrected ordinary least squares (COLS). The resulting technical efficiency estimates range from 0.980 for the Netherlands to 0.784 for Italy, with a mean of 0.863. The distance function results are also compared with those obtained from single-output production functions, where aggregate output measures are formed using either total revenue or a Tornqvist index. The results obtained indicate substantial differences in parameter estimates and technical efficiency rankings, casting significant doubt upon the reliability of these single-output models, particularly when a total revenue measure is used to proxy aggregate output. [less ▲] Detailed reference viewed: 145 (2 ULg)A comparison of parametric and non-parametric distance functions: with application to European Railways ; Perelman, Sergio in European Journal of Operational Research (1999), (117), 326-339 In this paper we use multi-output distance functions to investigate technical inefficiency in European railways. The principle aim of the paper is to compare the results obtained from the three ... [more ▼] In this paper we use multi-output distance functions to investigate technical inefficiency in European railways. The principle aim of the paper is to compare the results obtained from the three alternative methods of estimating multioutput distance functions. Namely, the construction of a parametric frontier using linear programming; data envelopment analysis (DEA) and corrected ordinary least squares (COLS). Input-orientated, output-orientated and constant returns to scale (CRS) distance functions are estimated and compared. The results indicate a strong degree of correlation between the input- and output-orientated results for each of the three methods. There are also significant correlations observed between the results obtained using the alternative estimation methods. The strongest correlations being between the parametric linear programming and the COLS methods. Finally, the paper concludes with the suggestion that a combination of the technical efficiency scores, obtained from the three different methods, be used as the preferred set of scores. This idea is borrowed from the time-series forecasting literature. [less ▲] Detailed reference viewed: 385 (1 ULg)Accounting for Environmental Influences in Stochastic Frontier Models: With Application to International Airlines ; Perelman, Sergio ; in Journal of Productivity Analysis (1999), 11 The principal aim of this paper is to measure the efficiency of international airlines. We obtain measures of technical efficiency from stochastic frontier production functions which have been adjusted to ... [more ▼] The principal aim of this paper is to measure the efficiency of international airlines. We obtain measures of technical efficiency from stochastic frontier production functions which have been adjusted to account for environmental influences such as network conditions, geographical factors, etc. We observe that two alternative approaches to this problem have been proposed in the efficiency measurement literature. One assumes that the environmental factors influence the shape of the technology while the other assumes that they directly influence the degree of technical inefficiency. In this paper we compare the results obtained when using these two approaches. The two sets of results provide similar rankings of airlines but suggest differing degrees of technical inefficiency. Both sets of results also suggest that Asian/Oceanic airlines are technically more efficient than European and North American airlines but that the differences are essentially due to more favourable environmental conditions. Nevertheless, it is among Asian companies that the major improvements in managerial efficiency (technical efficiency with environmental factors netted out) took place over the sample period (1977–1990). [less ▲] Detailed reference viewed: 105 (7 ULg)Efficiency measurement, multiple-output technologie and distance functions: With application to European Railways ; Perelman, Sergio Report (1996) The single-output production function has long been regarded as one of the principle limitations of the econometric approach to technical efficiency measurement. If one wished to investigate efficiency in ... [more ▼] The single-output production function has long been regarded as one of the principle limitations of the econometric approach to technical efficiency measurement. If one wished to investigate efficiency in a multiple-output industry using econometric methods one would usually either: (a) aggregate outputs into a single index of output (e.g., total revenue or a multilateral Tornqvist output index); or (b) attempt to model the technology using a dual cost function. The first of these methods require that output prices be observable (and reflect revenue maximising behaviour), while the latter approach requires an assumption of cost-minimising behaviour. There are a number of instances, however, when neither of these requirements are met (the public sector contains many examples). In this study we outline the recently developed distance function solution to the multi-output problem. The method is illustrated using data on European railways. Output-orientated, input-orientated and constant returns to scale distance functions are estimated using corrected ordinary least squares. The distance function estimates are also compared with production function estimates involving aggregate output measures. These comparisons indicate that, for the case of European railways, a production function involving a multilateral Tornqvist output index exhibits substantially less aggregation bias relative to a production function that uses total revenue as a measure of aggregate output. [less ▲] Detailed reference viewed: 650 (2 ULg) |
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