IDEAS home Printed from https://ideas.repec.org/a/eee/juipol/v54y2018icp125-131.html
   My bibliography  Save this article

Does non-revenue water affect Malaysia's water services industry productivity?

Author

Listed:
  • See, Kok Fong
  • Ma, Zhanxin

Abstract

This study examines the total factor productivity (TFP) changes in the Malaysian water services industry from 1999 to 2012 using a global Malmquist Luenberger index method incorporating an undesirable output, namely non-revenue water. The results show that the Malaysian water services industry experienced a declining TFP of 0.72 percent per year, with technology regression being the primary cause of the annual TFP decrease. Several initiatives are suggested to reduce non-revenue water in Malaysia. The findings provide useful insights that can be incorporated into future reforms of the industry.

Suggested Citation

  • See, Kok Fong & Ma, Zhanxin, 2018. "Does non-revenue water affect Malaysia's water services industry productivity?," Utilities Policy, Elsevier, vol. 54(C), pages 125-131.
    • Handle: RePEc:eee:juipol:v:54:y:2018:i:c:p:125-131
    DOI: 10.1016/j.jup.2018.04.006
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0957178716301503
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jup.2018.04.006?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Carvalho, Pedro & Marques, Rui Cunha & Berg, Sanford, 2012. "A meta-regression analysis of benchmarking studies on water utilities market structure," Utilities Policy, Elsevier, vol. 21(C), pages 40-49.
    2. Diogo Cunha Ferreira & Rui Cunha Marques, 2016. "Malmquist and Hicks–Moorsteen Productivity Indexes for Clusters Performance Evaluation," International Journal of Information Technology & Decision Making (IJITDM), World Scientific Publishing Co. Pte. Ltd., vol. 15(05), pages 1015-1053, September.
    3. Kim Woodbury & Brian Dollery, 2004. "Efficiency Measurement in Australian Local Government: The Case of New South Wales Municipal Water Services," Review of Policy Research, Policy Studies Organization, vol. 21(5), pages 615-636, September.
    4. Ray, Subhash C & Desli, Evangelia, 1997. "Productivity Growth, Technical Progress, and Efficiency Change in Industrialized Countries: Comment," American Economic Review, American Economic Association, vol. 87(5), pages 1033-1039, December.
    5. Dong-hyun Oh, 2010. "A global Malmquist-Luenberger productivity index," Journal of Productivity Analysis, Springer, vol. 34(3), pages 183-197, December.
    6. Picazo-Tadeo, Andres J. & Saez-Fernandez, Francisco J. & Gonzalez-Gomez, Francisco, 2008. "Does service quality matter in measuring the performance of water utilities," Utilities Policy, Elsevier, vol. 16(1), pages 30-38, March.
    7. Chen Lin & Sanford Berg, 2008. "Incorporating Service Quality into Yardstick Regulation: An Application to the Peru Water Sector," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 32(1), pages 53-75, February.
    8. Emrouznejad, Ali & Yang, Guo-liang, 2016. "A framework for measuring global Malmquist–Luenberger productivity index with CO2 emissions on Chinese manufacturing industries," Energy, Elsevier, vol. 115(P1), pages 840-856.
    9. Steven Renzetti & Diane P. Dupont, 2009. "Measuring the Technical Efficiency of Municipal Water Suppliers: The Role of Environmental Factors," Land Economics, University of Wisconsin Press, vol. 85(4), pages 627-636.
    10. Lin, Chen, 2005. "Service quality and prospects for benchmarking: Evidence from the Peru water sector," Utilities Policy, Elsevier, vol. 13(3), pages 230-239, September.
    11. Estache, Antonio & Kouassi, Eugene, 2002. "Sector organization, governance, and the inefficiency of African water utilities," Policy Research Working Paper Series 2890, The World Bank.
    12. Tan, Jeff, 2012. "The Pitfalls of Water Privatization: Failure and Reform in Malaysia," World Development, Elsevier, vol. 40(12), pages 2552-2563.
    13. Abbott, Malcolm & Cohen, Bruce & Wang, Wei Chun, 2012. "The performance of the urban water and wastewater sectors in Australia," Utilities Policy, Elsevier, vol. 20(1), pages 52-63.
    14. Banker, Rajiv D. & Zheng, Zhiqiang (Eric) & Natarajan, Ram, 2010. "DEA-based hypothesis tests for comparing two groups of decision making units," European Journal of Operational Research, Elsevier, vol. 206(1), pages 231-238, October.
    15. Antonioli, B. & Filippini, M., 2001. "The use of a variable cost function in the regulation of the Italian water industry," Utilities Policy, Elsevier, vol. 10(3-4), pages 181-187.
    16. David Saal & David Parker & Tom Weyman-Jones, 2007. "Determining the contribution of technical change, efficiency change and scale change to productivity growth in the privatized English and Welsh water and sewerage industry: 1985–2000," Journal of Productivity Analysis, Springer, vol. 28(1), pages 127-139, October.
    17. Coelli, Tim & Perelman, Sergio, 1999. "A comparison of parametric and non-parametric distance functions: With application to European railways," European Journal of Operational Research, Elsevier, vol. 117(2), pages 326-339, September.
    18. Tupper, Henrique Cesar & Resende, Marcelo, 2004. "Efficiency and regulatory issues in the Brazilian water and sewage sector: an empirical study," Utilities Policy, Elsevier, vol. 12(1), pages 29-40, March.
    19. Saal, David S & Parker, David, 2001. "Productivity and Price Performance in the Privatized Water and Sewerage Companies of England and Wales," Journal of Regulatory Economics, Springer, vol. 20(1), pages 61-90, July.
    20. Färe, Rolf & Grosskopf, Shawna & Pasurka, Carl A., 2007. "Environmental production functions and environmental directional distance functions," Energy, Elsevier, vol. 32(7), pages 1055-1066.
    21. Kristof Witte & Rui Marques, 2010. "Influential observations in frontier models, a robust non-oriented approach to the water sector," Annals of Operations Research, Springer, vol. 181(1), pages 377-392, December.
    22. Tim Coelli & Denis Lawrence (ed.), 2006. "Performance Measurement and Regulation of Network Utilities," Books, Edward Elgar Publishing, number 3801.
    23. C. O’Donnell, 2012. "An aggregate quantity framework for measuring and decomposing productivity change," Journal of Productivity Analysis, Springer, vol. 38(3), pages 255-272, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Tourinho, Marco & Barbosa, Flávia & Santos, Paulo Rosa & Pinto, Francisco Taveira & Camanho, Ana S., 2023. "Productivity change in Brazilian water services: A benchmarking study of national and regional trends," Socio-Economic Planning Sciences, Elsevier, vol. 86(C).
    2. Mocholi-Arce, Manuel & Sala-Garrido, Ramon & Molinos-Senante, Maria & Maziotis, Alexandros, 2023. "Profit productivity change in the English and Welsh water sector: Impact of the price reviews," Utilities Policy, Elsevier, vol. 82(C).
    3. Goh, Kim Huat & See, Kok Fong, 2021. "Measuring the productivity growth of Malaysia's water sector: Implications for regulatory reform," Utilities Policy, Elsevier, vol. 71(C).
    4. Şişman, Eyüp & Kızılöz, Burak, 2020. "Trend-risk model for predicting non-revenue water: An application in Turkey," Utilities Policy, Elsevier, vol. 67(C).
    5. Goh, Kim Huat & See, Kok Fong, 2023. "Incorporating nonrevenue water in the efficiency assessment of water supply utilities: A parametric enhanced hyperbolic distance function," Utilities Policy, Elsevier, vol. 81(C).
    6. Tourinho, Marco & Santos, Paulo Rosa & Pinto, Francisco Taveira & Camanho, Ana S., 2022. "Performance assessment of water services in Brazilian municipalities: An integrated view of efficiency and access," Socio-Economic Planning Sciences, Elsevier, vol. 79(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Walter, Matthias & Cullmann, Astrid & von Hirschhausen, Christian & Wand, Robert & Zschille, Michael, 2009. "Quo vadis efficiency analysis of water distribution? A comparative literature review," Utilities Policy, Elsevier, vol. 17(3-4), pages 225-232, September.
    2. Mande Buafua, Patrick, 2015. "Efficiency of urban water supply in Sub-Saharan Africa: Do organization and regulation matter?," Utilities Policy, Elsevier, vol. 37(C), pages 13-22.
    3. Romano, Giulia & Molinos-Senante, María & Guerrini, Andrea, 2017. "Water utility efficiency assessment in Italy by accounting for service quality: An empirical investigation," Utilities Policy, Elsevier, vol. 45(C), pages 97-108.
    4. Jian Chang & Wanhua Li & Yaodong Zhou & Peng Zhang & Hengxin Zhang, 2022. "Impact of Public Service Quality on the Efficiency of the Water Industry: Evidence from 147 Cities in China," Sustainability, MDPI, vol. 14(22), pages 1-17, November.
    5. Jayanath Ananda & Nicholas Pawsey, 2019. "Benchmarking service quality in the urban water industry," Journal of Productivity Analysis, Springer, vol. 51(1), pages 55-72, February.
    6. Danelon, André F. & Spolador, Humberto F.S. & Kumbhakar, Subal C., 2021. "Weather and population size effects on water and sewer treatment costs: Evidence from Brazil," Journal of Development Economics, Elsevier, vol. 153(C).
    7. 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 w," MPRA Paper 48247, University Library of Munich, Germany.
    8. Mocholi-Arce, Manuel & Sala-Garrido, Ramon & Molinos-Senante, Maria & Maziotis, Alexandros, 2021. "Water company productivity change: A disaggregated approach accounting for changes in inputs and outputs," Utilities Policy, Elsevier, vol. 70(C).
    9. Michael Zschille & Matthias Walter, 2012. "The performance of German water utilities: a (semi)-parametric analysis," Applied Economics, Taylor & Francis Journals, vol. 44(29), pages 3749-3764, October.
    10. Picazo-Tadeo, Andrés J. & Sáez-Fernández, Francisco J. & González-Gómez, Francisco, 2008. "Assesing Performance in the Management of the Urban Water Cycle," Efficiency Series Papers 2008/01, University of Oviedo, Department of Economics, Oviedo Efficiency Group (OEG).
    11. Chen Lin & Sanford Berg, 2008. "Incorporating Service Quality into Yardstick Regulation: An Application to the Peru Water Sector," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 32(1), pages 53-75, February.
    12. Andrea Guerrini & Giulia Romano & Bettina Campedelli, 2013. "Economies of Scale, Scope, and Density in the Italian Water Sector: A Two-Stage Data Envelopment Analysis Approach," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 27(13), pages 4559-4578, October.
    13. Alexandr Akimov & Paul Simshauser, 2018. "Performance measurement in Australian water utilities: Current state and future directions," Discussion Papers in Finance finance:201802, Griffith University, Department of Accounting, Finance and Economics.
    14. Picazo-Tadeo, Andres J. & Saez-Fernandez, Francisco J. & Gonzalez-Gomez, Francisco, 2008. "Does service quality matter in measuring the performance of water utilities," Utilities Policy, Elsevier, vol. 16(1), pages 30-38, March.
    15. Mellah, Thuraya & Ben Amor, Tawfik, 2016. "Performance of the Tunisian Water Utility: An input-distance function approach," Utilities Policy, Elsevier, vol. 38(C), pages 18-32.
    16. Jinjin Zhao, 2020. "Productivity change in the privatized water sector in China (1999–2006)," Journal of Productivity Analysis, Springer, vol. 53(2), pages 227-241, April.
    17. Francisco González-Gómez & Miguel García‐Rubio & Francisco Alcalá-Olid & M. Ortega-Díaz, 2013. "Outsourcing and Efficiency in the Management of Rural Water Services," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 27(3), pages 731-747, February.
    18. Roberto Martínez-Espiñeira & Maria A. García-Valiñas & Francisco González-Gómez, 2009. "Does Private Management of Water Supply Services Really Increase Prices? An Empirical Analysis in Spain," Urban Studies, Urban Studies Journal Limited, vol. 46(4), pages 923-945, April.
    19. Mocholi-Arce, Manuel & Sala-Garrido, Ramon & Molinos-Senante, Maria & Maziotis, Alexandros, 2021. "Performance assessment of water companies: A metafrontier approach accounting for quality of service and group heterogeneities," Socio-Economic Planning Sciences, Elsevier, vol. 74(C).
    20. Graziano Abrate & Fabrizio Erbetta & Giovanni Fraquelli, 2011. "Public utility planning and cost efficiency in a decentralized regulation context: the case of the Italian integrated water service," Journal of Productivity Analysis, Springer, vol. 35(3), pages 227-242, June.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:juipol:v:54:y:2018:i:c:p:125-131. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.sciencedirect.com/journal/utilities-policy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.