Using Supervised Environmental Composites in Production and Efficiency Analyses: An Application to Norwegian Electricity Networks

Luis Orea, Christian Growitsch, Tooraj Jamasb

Publikation: Bidrag til tidsskriftTidsskriftartikelpeer review


Although supervised dimension reduction methods have been extensively applied in different scientific fields, they have hardly ever been used in production economics. Nonetheless, these methods can also be useful in regulation of natural monopolies, where firms' cost and performance are affected by a large number of environmental factors. As economic theory suggests, at the presence of other relevant production or cost drivers, the traditional all-inclusive assumption is not satisfied. This paper shows that purging the data allows us to address this issue when analyzing the effect of weather and geography on efficiency in the context of the Norwegian electricity distribution networks.
TidsskriftCompetition and Regulation in Network Industries
Udgave nummer3
Sider (fra-til)260-287
Antal sider28
StatusUdgivet - sep. 2015
Udgivet eksterntJa


  • Electricity networks
  • Environmental conditions
  • Supervised composites