Mathematical Problems in Engineering
Volume 2010 (2010), Article ID 593059, 20 pages
doi:10.1155/2010/593059
Research Article

The Cost Efficiency of the Brazilian Electricity Distribution Utilities: A Comparison of Bayesian SFA and DEA Models

Marcus Vinicius Pereira de Souza,1 Madiagne Diallo,1 Reinaldo Castro Souza,2 and Tara Keshar Nanda Baidya1

1Departamento de Engenharia Industrial, Pontifícia Universidade Católica do Rio de Janeiro, PUC-RJ, Rua Marquês de São Vicente 225, Gávea, 22451-041 Rio de Janeiro, RJ, Brazil
2Departamento de Engenharia Elétrica, Pontifícia Universidade Católica do Rio de Janeiro, PUC-RJ, Rua Marquês de São Vicente 225, Gávea, 22451-041 Rio de Janeiro, RJ, Brazil

Received 29 August 2009; Revised 25 February 2010; Accepted 20 May 2010

Academic Editor: Wei-Chiang Hong

Copyright © 2010 Marcus Vinicius Pereira de Souza et al. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

The purpose of this study is to evaluate the efficiency indices for 60 Brazilian electricity distribution utilities. These scores are obtained by DEA (Data Envelopment Analysis) and Bayesian Stochastic Frontier Analysis models, two techniques that can reduce the information asymmetry and improve the regulator's skill to compare the performance of the utilities, a fundamental aspect in incentive regulation schemes. In addition, this paper also addresses the problem of identifying outliers and influential observations in deterministic nonparametric DEA models.