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Effect of scale on water users’ associations’ performance in Tunisia: nonparametric model for scale elasticity calculation

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  • Frija, Aymen
  • Buysse, Jeroen
  • Speelman, Stijn
  • Chebil, Ali
  • Van Huylenbroeck, Guido

Abstract

The paper aims to investigate the economies of scale of Water Users’ Associations (WUA) in Tunisia. During the last years there has been a lot of discussion in Tunisia about the optimal size of WUAs, which allows more efficient management of the water resources at the local level. In this work we propose to see if the size of the WUA in the governorate of Nabeul (Central-Eastern part of Tunisia) would have to increase or decrease in order to maximize their efficiency. Apart from this qualification we also quantify the scale efficiency and scale elasticity of the WUA using Data Envelopment Analysis (DEA) models. The results show that the output space (volume of water distributed and number of ha managed and irrigated) of the WUA that attain a high level of scale efficiency is highly diverse, indicating that the number of ha irrigated and the volume of water distributed are not explaining the differences in the scale efficiency of WUA. The calculation of scale elasticity of the WUA shows that 41% of the WUA are operating at decreasing returns to scale (DRS) while 16% and 43% operate at constant (CRS) and increasing (IRS) returns to scale, respectively. The scale orientation was found to be depending on the output density rather than on the output size. Thus, WUA located in more irrigation-intensified areas were found to be IRS oriented. WUA operating at CRS were found to have the minimum costs, which is in line with the theoretical predictions that suggest that the average productivity is maximized when the scale efficiency is equal to 1.

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Bibliographic Info

Paper provided by African Association of Agricultural Economists (AAAE) & Agricultural Economics Association of South Africa (AEASA) in its series 2010 AAAE Third Conference/AEASA 48th Conference, September 19-23, 2010, Cape Town, South Africa with number 95982.

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Date of creation: Sep 2010
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Handle: RePEc:ags:aaae10:95982

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Related research

Keywords: Resource /Energy Economics and Policy;

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  1. Balaguer-Coll, Maria Teresa & Prior, Diego & Tortosa-Ausina, Emili, 2007. "On the determinants of local government performance: A two-stage nonparametric approach," European Economic Review, Elsevier, vol. 51(2), pages 425-451, February.
  2. Torres, Marcelo & Morrison Paul, Catherine J., 2006. "Driving forces for consolidation or fragmentation of the US water utility industry: A cost function approach with endogenous output," Journal of Urban Economics, Elsevier, vol. 59(1), pages 104-120, January.
  3. Erbetta, Fabrizio & Rappuoli, Luca, 2008. "Optimal scale in the Italian gas distribution industry using data envelopment analysis," Omega, Elsevier, vol. 36(2), pages 325-336, April.
  4. R. D. Banker & A. Charnes & W. W. Cooper, 1984. "Some Models for Estimating Technical and Scale Inefficiencies in Data Envelopment Analysis," Management Science, INFORMS, vol. 30(9), pages 1078-1092, September.
  5. António Afonso & Mariana Santos, 2005. "Students and Teachers: A DEA Approach to the Relative Efficiency of Portuguese Public Universities," Working Papers Department of Economics 2005/07, ISEG - School of Economics and Management, Department of Economics, University of Lisbon.
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