COMPARING LIKE WITH LIKE IN PRODUCTIVITY STUDIES - APPLES, ORANGES AND ELECTRICITY

A methodology is developed to incorporate operating environment variab les in the measurement of Total Factor Productivity. When no account i s taken of operating environments, the Queensland Electricity Supply I ndustry (QESI) was found to be 13 per cent more productive than the Ne w South Wales Electricity Supply Industry (NSWESI). However, when perf ormance is adjusted for the relatively large area serviced by the QESI , the productivity advantage it has over the NSWESI expands to about 2 0 per cent.