Deregulation, efficiency and policy determination: An analysis of Australia's electricity distribution sector

In 1998, the Australian electricity distribution was deregulated with aim of promoting competition and reducing retail prices. However, since then these outcomes have not transpired, which raises question whether there may be underlying causes leading to inefficiencies within power industry. To assess performance system sources (in)efficiency deregulation, we employ Simar Wilson's (2007) double bootstrap data envelopment analysis truncated regression approach. The results suggest that most distributors were operating well below efficient levels for period concerned. second-stage analysis, indicate reliability promotes efficiency suggesting a focus should placed on continuous supply energy. Specifically, inefficient can improve network by replacing aged poles expansion market size could encourage healthy competition. • in 1998. main objective deregulation promote reduce These objectives been fully achieved. Analysis suggests more than 70% businesses inefficiently. Provides valuable insights issues are faced regulators policy decision-makers around world.