Estimating the cost of improving quality in electricity distribution: A parametric distance function approach

► We estimate the implicit cost of outages for the main distribution company in France. ► For this purpose, we make use of a parametric distance function approach. ► Marginal quality improvements tend to be more expensive as quality itself improves. ► The cost of preventing one interruption varies from 1.8 € to 69.2 € (2005 prices). ► We estimate that, in average, it lays 33% above the regulated price of quality.