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The Influence Of Regulation And The Operational Environment On Chinese Urban Water Utilities

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  • Li, Fan
  • Phillips, Michelle

Abstract

China is currently facing water scarcity issues, which can partially be relieved with improvements in efficiency in its urban water supply sector. Using a manually collected utility-level dataset for 2009-2013, we examine the regulatory context and performance of Chinese urban water utilities, taking into account their operational environment. Our main findings are that: (1) an increase in the number of non-technical staff does not increase output levels, while an increase in the number of technical staff, length of pipe or electricity usage can increase output; (2) customer density and non-household user rates are associated with lower levels of inefficiency (or higher levels of measured efficiency), while outsourcing staff rate, non-revenue water rate, and average piped water pressure do not significantly affect efficiency. These results suggest that Chinese urban water utilities can be improved through performance-based regulation and incentives that take into account the operational environment of utilities.

Suggested Citation

  • Li, Fan & Phillips, Michelle, 2016. "The Influence Of Regulation And The Operational Environment On Chinese Urban Water Utilities," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235160, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea16:235160
    DOI: 10.22004/ag.econ.235160
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    Industrial Organization; Production Economics; Resource /Energy Economics and Policy;
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