Theft and losses in Turkish electricity sector:

Official URL: http://risc01.sabanciuniv.edu/record=b1126720 (Table of Contents)

Since the 1980s, electricity industries in many countries have been undergoing privatization and liberalization in order to generate improvements in efficiency and quality. Liberalization and privatization can only be successful if privatized utilities can be financially viable on their own and not rely on government subsidies except for those that are designed for social objectives such as universal service. In the case of Turkey, an important impediment to privatization and liberalization are thefts and losses that generate large asymmetries in costs across different regions. In international comparisons these costs are exceptionally high and they threaten the economic and political feasibility of reform. This master thesis undertakes an econometric analysis to identify factors that cause such large variances in electricity theft-losses across different regions of Turkey. Once these factors are identified, empirical results are then used to derive implications for both privatizations as well as principles that should guide tariff design, including possible subsidy mechanisms.