Relative efficiency measurement and prospects for yardstick competition in Brazilian electricity distribution

The paper considers the non-parametric methodology of Data Envelopment Analysis (DEA) in the context of efficiency measurement for Brazilian electricity distribution in 1997/98, indicating the existence of firms operating substantially below the efficiency frontier. The potential and difficulties associated with the implementation of yardstick competition schemes are then discussed, stressing in particular the role of relative efficiency scores obtained from the DEA approach.