Comparing Like with Like in Productivity Studies: Apples, Oranges and Electricity.

A methodology is developed to incorporate operating environment variables in the measurement of total factor productivity. When no account is taken of operating environments, the Queensland electricity supply industry was found to be 13 percent more productive than the New South Wales electricity supply industry. However, when performance is adjusted for the relatively large area serviced by the Queensland electricity supply industry, the productivity advantage it has over the New South Wales electricity supply industry expands to about 20 percent. Copyright 1994 by The Economic Society of Australia.