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Quo vadis efficiency analysis of water distribution? A comparative literature review

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  • Walter, Matthias
  • Cullmann, Astrid
  • von Hirschhausen, Christian
  • Wand, Robert
  • Zschille, Michael

Abstract

Recognizing the growing importance of scientific benchmarking in water distribution, we provide a comprehensive survey of the available literature. We begin with a discussion about the (limited) use of benchmarking in the regulation of UK water utilities, and then extend the analysis to regulated water sectors in other countries. We find no clear impact of public or private ownership; instead, the institutional settings appear to be a dominant driver of efficiency. Quality and structural variables are significant parameters; and water losses and population density are also important drivers. Analysis reveals that economies of scale only exist in fragmented water industries, whereas economies of density are omnipresent. We find evidence suggesting important economies of scope (e.g. between water and sewerage). Finally, we summarize the tensions that exist in attempting to measure efficiency in the water industry and draw conclusions about how to improve efficiency analysis in the future.

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Bibliographic Info

Article provided by Elsevier in its journal Utilities Policy.

Volume (Year): 17 (2009)
Issue (Month): 3-4 (September)
Pages: 225-232

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Handle: RePEc:eee:juipol:v:17:y:2009:i:3-4:p:225-232

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Web page: http://www.elsevier.com/locate/inca/30478

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Keywords: Water distribution Efficiency analysis Literature review;

References

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Citations

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Cited by:
  1. Foellmi, Reto & Meister, Urs, 2011. "Enhancing the Efficiency of Water Supply – Product Market Competition versus Trade," CEPR Discussion Papers 8423, C.E.P.R. Discussion Papers.
  2. Giulia Romano & Andrea Guerrini & Silvia Vernizzi, 2013. "Ownership, Investment Policies and Funding Choices of Italian Water Utilities: An Empirical Analysis," Water Resources Management, Springer, vol. 27(9), pages 3409-3419, July.
  3. Peeter Peda & Giuseppe Grossi & Margo Liik, 2013. "Do ownership and size affect the performance of water utilities? Evidence from Estonian municipalities," Journal of Management and Governance, Springer, vol. 17(2), pages 237-259, May.
  4. Ferro, Gustavo & Romero, Carlos A. & Covelli, María Paula, 2011. "Regulation and performance: A production frontier estimate for the Latin American water and sanitation sector," Utilities Policy, Elsevier, vol. 19(4), pages 211-217.
  5. Ferro, Gustavo & Lentini, Emilio & Mercadier, Augusto & Romero, Carlos A., 2010. "Retornos a escala en agua y saneamiento: estimaciones para América Latina
    [Returns to scale in water and sanitation: estimates for Latin Amercia]
    ," MPRA Paper 20324, University Library of Munich, Germany, revised Jan 2010.
  6. Ruester, Sophia & Zschille, Michael, 2010. "The impact of governance structure on firm performance: An application to the German water distribution sector," Utilities Policy, Elsevier, vol. 18(3), pages 154-162, September.
  7. Romano, Giulia & Guerrini, Andrea, 2011. "Measuring and comparing the efficiency of water utility companies: A data envelopment analysis approach," Utilities Policy, Elsevier, vol. 19(3), pages 202-209.
  8. Ferro, Gustavo & Lentini, Emilio J. & Mercadier, Augusto C. & Romero, Carlos A., 2013. "Eficiencia en la prestación de agua y saneamiento y su vinculación con regiones, propiedad e independencia de los prestadores en Brasil
    [Efficiency in water and sanitation providers and its links
    ," MPRA Paper 48247, University Library of Munich, Germany.
  9. Michael Zschille, 2012. "Consolidating the Water Industry: An Analysis of the Potential Gains from Horizontal Integration in a Conditional Efficiency Framework," Discussion Papers of DIW Berlin 1187, DIW Berlin, German Institute for Economic Research.
  10. Herrala, Maila Elina & Huotari, Heikki & Haapasalo, Harri Jouni Olavi, 2012. "Governance of Finnish waterworks – A DEA comparison of selected models," Utilities Policy, Elsevier, vol. 20(1), pages 64-70.
  11. Anne-Kathrin Faust & Andrea Baranzini, 2014. "The economic performance of Swiss drinking water utilities," Journal of Productivity Analysis, Springer, vol. 41(3), pages 383-397, June.

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