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Water Losses and Hydrographical Regions Influence on the Cost Structure of the Portuguese Water Industry

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Author Info

  • Rita Martins

    ()
    (Faculty of Economics,University of Coimbra)

  • Fernando Coelho
  • Adelino Fortunato

    ()
    (Faculty of Economics and GEMF,University of Coimbra)

Abstract

There 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.

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Bibliographic Info

Paper provided by GEMF - Faculdade de Economia, Universidade de Coimbra in its series GEMF Working Papers with number 2008-06.

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Length: 35 pages
Date of creation: Sep 2008
Date of revision:
Publication status: Published in Journal of Productivity Analysis, 38(1): 81-94, 2012.
Handle: RePEc:gmf:wpaper:2008-06

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Keywords: water utilities; water losses; river basins; multi-product cost function;

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References

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Cited by:
  1. 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.
  2. 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.

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