Water Losses and Hydrographical Regions Influence on the Cost Structure of the Portuguese Water Industry
AbstractThere is a consensus that the emphasis on the management of water resources should be put on demand side policies. However, some questions remain to be solved on the supply side, which are frequently absent from empirical studies based on the estimation of cost functions. This paper aims to fill to some extent this gap in the literature by focusing the consequences of water losses reduction and the management of water resources based on their availability at an integrated river basin level. Major findings indicate that it would be better in terms of costs to maintain some level of water losses than to repair the leaks and suggest advantages from more concentration in the Portuguese water industry. In addition, the costs do not seem to be systematically influenced by the hydrographical regions to which water utilities belong, what might be due to the absence of appropriate cost accounting methods.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by GEMF - Faculdade de Economia, Universidade de Coimbra in its series GEMF Working Papers with number 2008-06.
Length: 35 pages
Date of creation: Sep 2008
Date of revision:
Publication status: Published in Journal of Productivity Analysis, 38(1): 81-94, 2012.
water utilities; water losses; river basins; multi-product cost function;
Other versions of this item:
- Rita Martins & Fernando Coelho & Adelino Fortunato, 2012. "Water losses and hydrographical regions influence on the cost structure of the Portuguese water industry," Journal of Productivity Analysis, Springer, Springer, vol. 38(1), pages 81-94, August.
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- L95 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Gas Utilities; Pipelines; Water Utilities
- Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Baumol, William J, 1977. "On the Proper Cost Tests for Natural Monopoly in a Multiproduct Industry," American Economic Review, American Economic Association, American Economic Association, vol. 67(5), pages 809-22, December.
- Ralph Turvey, 1976. "Analyzing the Marginal Cost of Water Supply," Land Economics, University of Wisconsin Press, vol. 52(2), pages 158-168.
- Kwoka, John E., 2002. "Vertical economies in electric power: evidence on integration and its alternatives," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 20(5), pages 653-671, May.
- Maria García-valiñas, 2005. "Efficiency and Equity in Natural Resources Pricing: A Proposal for Urban Water Distribution Service," Environmental & Resource Economics, European Association of Environmental and Resource Economists, European Association of Environmental and Resource Economists, vol. 32(2), pages 183-204, October.
- Giovanni Fraquelli & Massimiliano Piacenza & Davide Vannoni, 2004. "Scope and scale economies in multi-utilities: evidence from gas, water and electricity combinations," Applied Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 36(18), pages 2045-2057.
- Gallant, A. Ronald, 1982. "Unbiased determination of production technologies," Journal of Econometrics, Elsevier, Elsevier, vol. 20(2), pages 285-323, November.
- Paola Fabbri & Giovanni Fraquelli, 2000. "Costs and Structure of Technology in the Italian Water Industry," Empirica, Springer, Springer, vol. 27(1), pages 65-82, March.
- Kristof De Witte & Rui C. Marques, 2007. "Designing incenttives in local public utilities, an international comparison of the drinking water sector," Center for Economic Studies - Discussion papers, Katholieke Universiteit Leuven, Centrum voor Economische StudiÃ«n ces0732, Katholieke Universiteit Leuven, Centrum voor Economische Studiën.
- Baumol, William J & Willig, Robert D, 1986. "Contestability: Developments since the Book," Oxford Economic Papers, Oxford University Press, vol. 38(0), pages 9-36, Suppl. No.
- Renzetti, Steven, 1992. "Evaluating the welfare effects of reforming municipal water prices," Journal of Environmental Economics and Management, Elsevier, vol. 22(2), pages 147-163, March.
- Ford, J L & Warford, J J, 1969. "Cost Functions for the Water Industry," Journal of Industrial Economics, Wiley Blackwell, Wiley Blackwell, vol. 18(1), pages 53-63, November.
- Cécile Aubert & Arnaud Reynaud, 2005. "The Impact of Regulation on Cost Efficiency: An Empirical Analysis of Wisconsin Water Utilities," Journal of Productivity Analysis, Springer, Springer, vol. 23(3), pages 383-409, 07.
- Francisco González Gómez & Miguel Angel García Rubio, 2008. "Efficiency in the management of urban water services. What have we learned after four decades of research?," Hacienda Pública Española, IEF, IEF, vol. 185(2), pages 39-67, July.
- David S Saal & David Parker, 2000. "The impact of privatization and regulation on the water and sewerage industry in England and Wales: a translog cost function model," Managerial and Decision Economics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 21(6), pages 253-268.
- Cubbin, John & Tzanidakis, George, 1998. "Regression versus data envelopment analysis for efficiency measurement: an application to the England and Wales regulated water industry," Utilities Policy, Elsevier, Elsevier, vol. 7(2), pages 75-85, June.
- Marques, Rui Cunha, 2006. "A yardstick competition model for Portuguese water and sewerage services regulation," Utilities Policy, Elsevier, Elsevier, vol. 14(3), pages 175-184, September.
- Fuss, Melvyn & McFadden, Daniel & Mundlak, Yair, 1978. "A Survey of Functional Forms in the Economic Analysis of Production," Histoy of Economic Thought Chapters, McMaster University Archive for the History of Economic Thought, in: Fuss, Melvyn & McFadden, Daniel (ed.), Production Economics: A Dual Approach to Theory and Applications, volume 1, chapter 4 McMaster University Archive for the History of Economic Thought.
- Garcia, Serge & Reynaud, Arnaud, 2004. "Estimating the benefits of efficient water pricing in France," Resource and Energy Economics, Elsevier, Elsevier, vol. 26(1), pages 1-25, March.
- Gallant, A. Ronald, 1981. "On the bias in flexible functional forms and an essentially unbiased form : The fourier flexible form," Journal of Econometrics, Elsevier, Elsevier, vol. 15(2), pages 211-245, February.
- Bhattacharyya, Arunava & Harris, Thomas R. & Narayanan, Rangesan & Raffiee, Kambiz, 1995. "Specification and estimation of the effect of ownership on the economic efficiency of the water utilities," Regional Science and Urban Economics, Elsevier, Elsevier, vol. 25(6), pages 759-784, December.
- Lawrence B. Pulley & David B. Humphrey, 1991. "Scope economies: fixed costs, complementarity, and functional form," Working Paper, Federal Reserve Bank of Richmond 91-03, Federal Reserve Bank of Richmond.
- Byrnes, Patricia & Grosskopf, Shawna & Hayes, Kathy, 1986. "Efficiency and Ownership: Further Evidence," The Review of Economics and Statistics, MIT Press, vol. 68(2), pages 337-41, May.
- Feigenbaum, Susan & Teeples, Ronald, 1983. "Public versus Private Water Delivery: A Hedonic Cost Approach," The Review of Economics and Statistics, MIT Press, vol. 65(4), pages 672-78, November.
- John Ashton, 2000. "Cost efficiency in the UK water and sewerage industry," Applied Economics Letters, Taylor & Francis Journals, Taylor & Francis Journals, vol. 7(7), pages 455-458.
- Serge Garcia & Alban Thomas, 2001. "The Structure of Municipal Water Supply Costs: Application to a Panel of French Local Communities," Journal of Productivity Analysis, Springer, Springer, vol. 16(1), pages 5-29, July.
- Monteiro, Henrique, 2008. "Evolution of cost recovery levels in the Portuguese water supply and wastewater industry 1998-2005," MPRA Paper 11490, University Library of Munich, Germany.
- Michael Zschille, 2012. "Consolidating the Water Industry: An Analysis of the Potential Gains from Horizontal Integration in a Conditional Efficiency Framework," Discussion Papers of DIW Berlin 1187, DIW Berlin, German Institute for Economic Research.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sara Santos).
If references are entirely missing, you can add them using this form.