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Benchmarking service quality in the urban water industry

Author

Listed:
  • Jayanath Ananda

    (CQ University)

  • Nicholas Pawsey

    (Charles Sturt University)

Abstract

Providing secure and affordable drinking water and sewerage services is the primary mandate of the urban water industry. Water businesses must balance their service obligations and the quality of service delivered in order to maximize customer value. Being a monopoly industry, the urban water sector’s service levels and associated prices are not driven by competitive market pressures but through the regulatory processes. However, improving service quality often comes at a cost and yardstick regulation requires the evaluation and benchmarking of service quality within an economic efficiency framework. This paper uses a bootstrap Data Envelopment Analysis model to evaluate the service quality performance of the Australian urban water sector from 2009–2010 to 2015–2016. Specifically, the paper models the lack of service quality as undesirable outputs of water production. It estimates the Malmquist-Luenberger productivity index and its efficiency change and technical change components for 50 integrated water and sewerage utilities in Australia. Findings indicate that, overall, the sector’s quality-adjusted productivity has improved after a marked decline in 2010/2011. A comparison of the service quality productivity results with the conventional productivity measure revealed that the conventional analysis tends to underestimate the productivity growth. The paper concludes that benchmarking service quality helps the urban water sector to move from compliance-based regulation to best-practice regulation.

Suggested Citation

  • 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.
    • Handle: RePEc:kap:jproda:v:51:y:2019:i:1:d:10.1007_s11123-019-00545-w
    DOI: 10.1007/s11123-019-00545-w
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    References listed on IDEAS

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    Cited by:

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    2. Mocholi-Arce, Manuel & Sala-Garrido, Ramon & Molinos-Senante, Maria & Maziotis, Alexandros, 2022. "Performance assessment of the Chilean water sector: A network data envelopment analysis approach," Utilities Policy, Elsevier, vol. 75(C).
    3. Molinos-Senante, María & Delgado-Antequera, Laura & Gómez, Trinidad, 2022. "Measuring the quality of service of water companies: A two-stage goal programming synthetic index proposal," Socio-Economic Planning Sciences, Elsevier, vol. 79(C).
    4. Agostino, M. & Nifo, A. & Ruberto, S. & Scalera, D. & Trivieri, F., 2022. "Productivity changes in the automotive industry of three European countries. An application of the Malmquist index decomposition analysis," Structural Change and Economic Dynamics, Elsevier, vol. 61(C), pages 216-226.
    5. 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).
    6. Jean-Philippe Boussemart & Daouda Diakité & Raluca Parvulescu, 2023. "Performance of Water Utilities Evaluated from Different Stakeholders Perspectives: An Application to the Ivorian Sector," Journal of Productivity Analysis, Springer, vol. 60(1), pages 87-105, August.
    7. Jayanath Ananda & Nicholas Pawsey & Tahmid Nayeem, 2022. "Customer‐centric regulation: The case of Victorian urban water sector," Regulation & Governance, John Wiley & Sons, vol. 16(2), pages 536-556, April.
    8. 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).
    9. 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).
    10. D’Inverno, Giovanna & Carosi, Laura & Romano, Giulia, 2021. "Environmental sustainability and service quality beyond economic and financial indicators: A performance evaluation of Italian water utilities," Socio-Economic Planning Sciences, Elsevier, vol. 75(C).
    11. Maziotis, Alexandros & Molinos-Senante, Maria, 2022. "The impact of model specification and environmental variables on measuring the overall technical efficiency of water and sewerage services: Evidence from Chile," Structural Change and Economic Dynamics, Elsevier, vol. 61(C), pages 191-198.

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