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Technical efficiency in Chile's water and sanitation providers

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  • Ferro, Gustavo
  • Mercadier, Augusto C.

Abstract

Chile achieved universal levels of coverage in water, sewerage and wastewater treatment in urban areas. The providers show complete cost recovery, universal metering and diminishing consumption. But investments in Non-Revenue Water control have been deemed insufficient. We explore the sector's comparative technical efficiency, in recent years, and address new challenges related to Non-Revenue Water reduction. We find that a 10 percent reduction in Non-Revenue Water implies a 2.6 percent increase in the input vector. Regulators can induce providers to invest more by recognizing the increased costs, and influence efficiency gains sharing with clients, including automatic coefficients in the rate formula.

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  • Ferro, Gustavo & Mercadier, Augusto C., 2016. "Technical efficiency in Chile's water and sanitation providers," Utilities Policy, Elsevier, vol. 43(PA), pages 97-106.
    • Handle: RePEc:eee:juipol:v:43:y:2016:i:pa:p:97-106
    DOI: 10.1016/j.jup.2016.04.016
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    4. Amaral, António L. & Martins, Rita & Dias, Luís C., 2023. "Operational drivers of water reuse efficiency in Portuguese wastewater service providers," Utilities Policy, Elsevier, vol. 83(C).
    5. Maziotis, Alexandros & Villegas, Andrés & Molinos-Senante, María & Sala-Garrido, Ramon, 2020. "Impact of external costs of unplanned supply interruptions on water company efficiency: Evidence from Chile," Utilities Policy, Elsevier, vol. 66(C).
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    7. María Molinos-Senante & Ramon Sala-Garrido, 2017. "Decomposition of Productivity Growth of Water and Sewerage Companies: An Empirical Approach for Chile," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 31(13), pages 4309-4321, October.
    8. Vu, Khuong & Hartley, Kris, 2022. "Effects of digital transformation on electricity sector growth and productivity: A study of thirteen industrialized economies," Utilities Policy, Elsevier, vol. 74(C).
    9. Adriana Cobas & Alexandros Maziotis & Andrés Villegas, 2023. "Measurement of Efficiency and its Drivers in the Chilean Banking Industry," Working Papers Central Bank of Chile 987, Central Bank of Chile.
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    12. de Souza Pereira, Mariana & Magalhães Filho, Fernando Jorge Corrêa & de Morais Lima, Priscila & Tabak, Benjamin Miranda & Constantino, Michel, 2022. "Sanitation and water services: Who is the most efficient provider public or private? Evidences for Brazil," Socio-Economic Planning Sciences, Elsevier, vol. 79(C).

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