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Static versus dynamic DEA in electricity regulation: the case of US transmission system operators

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Abstract

In this paper a dynamic DEA-model (data envelopment analysis) is developed that takes up Nemoto and Goto’s (Econ Lett 64(1):51–56, 1999) concept of quasi-fixed inputs but can dispense with price-information as it solely deals with technical efficiencies that are derived in an additive-model type of setting. This model is applied to the data of 50 of the largest US electric transmission system operators in the period 2000–2006 in order to show that the static DEA-models that are usually employed by electricity regulators can lead to wrong conclusions about the enterprises’ efficiency since they ignore the short-run fixity of essential inputs like transmission lines.

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Authors and Affiliations

  1. Research Institute for Regulatory Economics, Vienna University of Economics and Business Administration, Heiligenstaedterstrasse 46-48, 1190, Vienna, Austria

    Philipp von Geymueller

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  1. Philipp von Geymueller
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Correspondence to Philipp von Geymueller.

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von Geymueller, P. Static versus dynamic DEA in electricity regulation: the case of US transmission system operators. Cent Eur J Oper Res 17, 397–413 (2009). https://doi.org/10.1007/s10100-009-0099-x

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  • DOI: https://doi.org/10.1007/s10100-009-0099-x

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