African Journal of Islamic Studies and Civilizations | 22 October 2009
Panel Data Estimation for Cost-Effectiveness Analysis of Power-Distribution Equipment Systems in Ethiopia: A Methodological Assessment
M, e, k, d, e, s, G, e, b, r, e, a, b, ,, M, i, s, a, l, T, e, s, s, e, m, a
Abstract
The study focuses on the cost-effectiveness analysis of power distribution equipment systems in Ethiopia, addressing the critical need for efficient and sustainable energy infrastructure. A mixed-method approach combining statistical modelling with empirical analysis was employed. Panel data from various regions in Ethiopia were collected over a five-year period (-). A Generalized Method of Moments (GMM) regression model was used to estimate the cost-effectiveness, accounting for potential endogeneity issues. The estimated GMM coefficients indicate that investment in modern power distribution systems significantly reduces operational costs by approximately 15% compared to traditional methods. This reduction is particularly pronounced in rural areas where infrastructure is less developed. This study provides robust evidence on the cost-effectiveness of different power distribution equipment models, offering a new framework for policymakers and investors in Ethiopia's energy sector. Based on the findings, it is recommended that government bodies prioritise investments in advanced technology to ensure long-term sustainability and efficiency in power distribution systems across all regions. The maintenance outcome was modelled as $Y<em>{it}=\beta</em>0+\beta<em>1X</em>{it}+u<em>i+\varepsilon</em>{it}$, with robustness checked using heteroskedasticity-consistent errors.