Abstract

PATINO MOYA, Yeinni Andrea; GOMEZ FLOREZ, Gustavo Adolfo  and  OSORIO MEDINA, Emma. Performance evaluation of energy distribution companies in Colombia: An application of stochastic frontier analysis. Ens. polit. econ. [online]. 2010, vol.28, n.62, pp.70-123. ISSN 0120-4483.

This study evaluates the performance, in terms of technical efficiency, of companies that distribute energy in Colombia during the period 2004-2007 period, using Stochastic Frontier Analysis (SFA). It uses a translog input distance function to represent the technology of electricity distribution, which permits considering the products as given and inputs as control variables. Empirical results do not show technological change or improvements in technical efficiency; moreover, we found that environmental variables are determinants of production technology. Therefore, management performance of the companies is influenced by the environment in which they operate. The results indicate that the technical efficiency of four of the companies analyzed reached above 90%. In general, the sector presents an average technical efficiency of 60.12% and an inefficiency component that represents 94.5% of the composite error term, indicating that random errors are due largely to inefficient companies.

Keywords : efficiency; stochastic frontier; energy distribution.

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