Crossing Non-parametric and Parametric Techniques for Measuring the Efficiency: Evidence from 65 European DSO

The present study analyzes the technical efficiency of 65 European DSO that operate in 16 European countries, for 2017, 2018 and 2019 time periods. Technical efficiency measures the ability of a company to minimize the use of inputs to produce a certain quantity of a product or service. To this end, a benchmarking analysis supported by a frontier analysis will be used, in which the level of efficiency is compared between peers. In methodological terms, the study is based on the application of a parametric (SFA), a non-parametric (DEA) and Total Productivity Indices (Malmquist) methods. These have been the methods most widely used by the different regulators to measure efficiency levels. These methods enable to assess the distance between the effective levels of efficiency of regulated companies and the efficiency frontier. The results obtained in the present study are relatively positive for Portuguese companies, placing the mainland DSO at efficiency levels between the 1st quartile and the efficiency frontier, while insular DSO are placed at efficiency levels belonging to the 2nd quartile.