Abstract
As part of a general program of market-based reform, New Zealand transformed the electrical supply industry from state-owned to commercially-oriented power companies. This paper tests the hypothesis that such privatization is efficiency-improving. A translog cost function is specified and estimated with controls for system (engineering) characteristics and environmental variables, and it is found that the reforms had substantial cost-reducing effects. The reforms are found to have benefitted customers, with the real price of electricity falling 16.4 percent, over the period.
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Scully, G.W. Reform and Efficiency Gains in the New Zealand Electrical Supply Industry. Journal of Productivity Analysis 11, 133–147 (1999). https://doi.org/10.1023/A:1007767631738
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DOI: https://doi.org/10.1023/A:1007767631738