Profit, productivity, and price differential: an international performance comparison of the natural gas transportation industry

The objective of this paper is to evaluate the performance of natural gas transportation utilities, focusing on the three-key strategic performance measures of profit, productivity, and price differential. We propose a methodology that expresses the three performance measures in a unified single equation using the Edgeworth index. The proposed methodology is applied to an international comparison of the performance of 28 natural gas transportation utilities operating in eight countries in which the business environments differ greatly. The empirical results show the possible causes of performance differences and may shed some light on the direction of regulatory policy, especially for developing countries that have relatively short histories in the natural gas industry, such as Korea. (C) 1999 Elsevier Science Ltd. All rights reserved.