124 APR 2014, VOLs.39 Nº 04 A STUDY ON THE EFFICIENCY IN POWER DISTRIBUTION COMPANIES OF TEHRAN (21 REGIONS) USING DATA ENVELOPMENT ANALYSIS METHOD (DEA) Mostafa Panahi,Faramarz Faghihi,Gholamreza Taravati Masrour RESUME El presente estudio intenta investigar la eficiencia técnica , económica y escala en las empresas de distribución de alimentación de Teherán , incluyendo 21 regiones , el crecimiento de la productividad de todos los factores a través del método de Malmquist durante 2007-2012 , así como la especificación de los factores afectivos utilizando Análisis Envolvente de Datos (DEA ) . Teniendo en cuenta la importancia de la cuestión de la eficiencia , es muy importante determinar los criterios actuales de eficiencia. Con respecto a la estructura actual de Teherán de distribución de energía de la empresa y el control cualitativo existente en las salidas de las compañías de distribución de energía , la aplicación de la DEA de entrada orientada parece ser más apropiada. A medida que el hallazgo de la investigación revelan , ineficiencia de escala es la ineficiencia más importante de las 21 regiones ` s Teherán. La mayor parte de las regiones en el área de salida de acto con el aumento de escala y educación ` s de los empleados no tiene ningún efecto significativo en la eficiencia de las regiones. Además , el crecimiento de la productividad de todos los factores durante el período considerado (2007-2012) es negativo debido a la utilización y actualizado de equipos antiguos en estas regiones. SUMMARY determine the actual efficiency criteria. With respect to the present structure of Tehran Power Distribution Company and the qualitative control existing in the outputs of Power Distribution Companies, applying input-oriented DEA seems to be more appropriate. As the research finding reveal, scale inefficiency is the most important inefficiency of Tehran`s 21 regions. Most of the regions in output area act with increasing scale and employee`s educations has no significant effect in the regions’ efficiency. Additionally, productivity growth of all factors during the considered period (2007-2012) is negative due to using old and out of date equipments in these regions. Introduction is an investigation of the efficiency in Power Distribution companies of Tehran including 21 regions during 2007-2012. Theoretical framework According to economic theories, efficiency is the result of optimizing resources production and allocation. In other words, in a productive unit, managers and workers tend to determine their production amount in such a way that use the production elements (capital and work force) optimally in addition to the maximum use of facilities, resources and proper costs allocation, considering the enterprise objectives and existing technical ability. Efficiency is a relative concept and to understand the amount of difference between efficiency and the expected (ideal) amounts, the performance of economic units should be compared with the efficiency in the potential conditions. Efficiency is to maximize the output relative to input. In other words, it is to maximize output by minimizing cost and certain production factors. With respect to the fact that efficiency is relative, the efficiency of an enterprise should be estimated in comparison with other enterprises or institutes. Considering the fact that efficiency focuses on maximizing output by economic organization or institute and is associated with some different concepts such as affectivity and productivity, affectivity is obtained by the amount of achieving to certain objectives and shows that to what extent the performed efforts have been led to the expected results. In fact, affectivity is related to the performance and efforts satisfaction while efficiency is associated with proper use of resources. Productivity is a combination of efficiency and affectivity and involves both categories. Briefly, affectivity focuses on the end, efficiency focuses on economic organization or institute and productivity depends on production factors. To determine the inefficiency of an economic enterprise, an index should be used as criterion. Principally, various methods of evaluating efficiency scientifically are introduced based on Farrell method. Farrell method introduces three kinds of efficiency for an enterprise and one kind of efficiency for industry. Technical efficiency (TE), allocative efficieny (AE) and economic efficiency (EE) are different kinds of efficiency for an enterprise (Farrell, 1957) which have been The present study attempts to investigate technical, economic and scale efficiency in Power Distribution companies of Tehran including 21 regions, productivity growth of all factors through Malmquist method during 2007-2012 as well as specifying the affective factors using Data Envelopment Analysis (DEA). Considering the importance of efficiency issue, it is highly important to ower industry is a dynamic and affective industry due to its infrastructural relation with all factors affecting the economy growth. Considering critical importance of electricity energy, it can be considered as a main factor providing economic development in a country. Power industry can be divided into three sections including generation, transmission and distribution. Each of these sections is of basic importance by itself. Among these three sections, power electricity distribution section is of specific importance due to its close relation with customers. Therefore, it is also important to investigate the efficiency and the affective factors in this section. Evaluating the efficiency can lead to find weaknesses and strengths of different points and contribute to present appropriate strategies in order to improve their performance. The present work KEYWORDS / DEA, Malmquist, Gholamreza Taravati Masrour MSc in Energy Economics, Faculty of Environment and Energy ,Science and Research Branch,Islamic Azad University, Tehran-Iran Mostafa Panahi PhD in Environment and Forest Assets, Department of Energy Economic,Faculty of Environmental and Energy,Science and Research Branch,Islamic Azad University,Tehran-Iran Faramarz Faghihi PhD in Electric Power, Faculty of Engineering,Science and Research Branch,Islamic Azad University ,Tehran-Iran