Abstract
Firm-specific and temporal patterns of technical efficiency of the interstate natural gas transmission industry during the implementation of the Natural Gas Policy Act are estimated by two alternative methodologies. A new panel stochastic frontier systems estimator exploits the potential exogeneity of certain regressors from firm effects. This allows for heterogeneity in slopes, as well as in intercepts. Patterns of technical efficiency based on the structural stochastic model are compared with those based on deterministic programming methods, data envelopment analysis. Concordant findings based on these alternative methodologies suggest a perversive pattern of declining technical efficiency in the industry during the period of phased in well-head price deregulation.
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Sickles, R.C., Streitwieser, M.L. (1992). Technical Inefficiency and Productive Decline in the U.S. Interstate Natural Gas Pipeline Industry Under the Natural Gas Policy Act. In: Gulledge, T.R., Lovell, C.A.K. (eds) International Applications of Productivity and Efficiency Analysis. Springer, Dordrecht. https://doi.org/10.1007/978-94-017-1923-0_8
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DOI: https://doi.org/10.1007/978-94-017-1923-0_8
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