The role of environmental factors in water utilities’ technical efficiency. Empirical evidence from Spanish companies

Picazo‐Tadeo, Andrés J.; Sáez-Fernández, Francisco Javier; González‐Gómez, Francisco

doi:10.1080/00036840601007310

Cited by 61 publications

(23 citation statements)

References 51 publications

(32 reference statements)

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“…22 The variable output density is calculated as the sum of water delivered to residential and non-residential customers, plus other water utilities, over the length of the network. The empirical evidence in the literature shows that a higher density usually has a positive impact on efficiency, see, for example, Picazo-Tadeo et al (2009), García-Sánchez (2006), or Tupper and Resende (2004.…”

Section: Data Descriptionmentioning

confidence: 99%

Nonparametric measures of returns to scale: an application to German water supply

Zschille

2013

Empir Econ

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The evaluation of market structures and the quantification of returns to scale in network industries usually are of high interest for researchers and policy makers. Regarding the debate on optimal market structures in German potable water supply, we use a cross-sectional sample of 364 German water utilities observed in 2006 to derive a nonparametric measure of scale elasticity for the water industry. The data sample is validated by applying a super-efficiency approach and a statistical testing procedure for outlier detection. Besides using a standard data envelopment analysis approach, a conditional efficiency approach is applied to account for the water utilities' operating environments. The results indicate non-decreasing returns to scale for the majority of water utilities and constant or non-increasing returns for larger utilities. Optimal firm size is found to be generally larger than the current sample median firm size. Efficiency improvements could be realized by increases in firm sizes and through a consolidation of the industry.

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Section: Data Descriptionmentioning

confidence: 99%

Nonparametric measures of returns to scale: an application to German water supply

Zschille

2013

Empir Econ

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“…Without aiming to be exhaustive, some of these papers are Ashton (2000), Bhattacharyya, Harris, Narayanan, and Raffiee (1995), Estache and Rossi (2002), and Jones and Mygind (2000). Recently, some papers have investigated the factors related with efficiency in water utilities, Anwandter and Ozuna (2002), García-Sánchez (2006), Picazo-Tadeo, Sáez-Fernández, and González-Gómez (2007) and Woodbury and Dollery (2004), among them. Tupper and Resende (2004) went a step further by computing adjusted technical efficiency scores for a sample of Brazilian water utilities.…”

Section: Introductionmentioning

confidence: 98%

Accounting for operating environments in measuring water utilities’ managerial efficiency

Picazo‐Tadeo

González‐Gómez

Sáez-Fernández

2009

The Service Industries Journal

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In this paper adjusted input-specific scores of technical efficiency are computed for a sample of Spanish water utilities. Performance is adjusted by netting out efficiency scores from the effect of operating environments and statistical noise. The results show that computation of adjusted efficiency scores at the input level manifestly improves the assessment of utilities' performance in our sample of water utilities. In addition, several environmental variables capable of affecting input-specific technical management are discovered, ownership or demand seasonality among them. Finally, distributions of conventional and adjusted scores of technical performance are found to be statistically different for some inputs.

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“…Empirical applications have been motivated by different concerns, including the study of the differences in efficiency between public and private-owned water utilities, or the effect of public regulations on utilities' performance. While it is not our intention to provide an exhaustive list, some of the most recent papers are Ashton (2000), Jones and Mygind (2000), Estache and Rossi (2002), Anwandter and Ozuna (2002), Corton (2003), Woodbury and Dollery (2004), Cubbin (2005), Kirkpatrick et al (2006), García-Valiñas and Muñiz (2007), Picazo-Tadeo et al (2007a, 2007b. However, these papers also share the characteristic of ignoring quality as a relevant dimension of the service produced by water utilities.…”

Section: Introductionmentioning

confidence: 99%

“…Only recent studies have included collected sewage and/or the amount of water treated as additional water company outputs (Estache and Trujillo, 2003;Tupper and Resende, 2004;Picazo-Tadeo et al, 2007b).…”

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confidence: 99%

Does service quality matter in measuring the performance of water utilities?

2008

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Abstract.-Quality is a dimension of water services that has been repeatedly omitted in the study of performance of water utilities. In this paper, we make use of Data Envelopment Analysis techniques (DEA) to compute both conventional quantity-based and quality-adjusted indicators of technical efficiency for a sample of Spanish water utilities. The key assumptions are that a lack of quality (bad quality) can be regarded as a bad output, and the existence of a trade-off between quantity and quality. Our main results indicate that quality matters in measuring technical performance, the difference between conventional and quality-adjusted evaluations representing the opportunity cost of maintaining quality. Averages and distribution functions significantly differ between both assessments of performance, although water utilities do not seem to rank differently.

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The role of environmental factors in water utilities’ technical efficiency. Empirical evidence from Spanish companies

Cited by 61 publications

References 51 publications

Nonparametric measures of returns to scale: an application to German water supply

Nonparametric measures of returns to scale: an application to German water supply

Accounting for operating environments in measuring water utilities’ managerial efficiency

Does service quality matter in measuring the performance of water utilities?

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