Efficiency and productivity (TFP) of the Turkish electricity distribution companies: An application of two-stage (DEA&Tobit) analysis

In this study, we analyze the efficiency performances of 21 Turkish electricity distribution companies during the period of 2002-2009. For this aim, we employ a two-stage analysis in order to take into account the business environment variables which are beyond the control of distribution companies. We determine the efficiency performances of the electricity distribution companies by help of DEA in the first stage. Then, in the second stage, using these calculated efficiency scores as dependent variable, we utilize Tobit model to determine the business environment variables which may explain the efficiency scores. According to the results, customer density of the region and the private ownership affect the efficiencies positively. Thus, the best strategy to improve efficiency in the market is privatizing the public distribution companies.