Andrés J. Picazo-Tadeo () (Universitat de València. Dpto. Economía Aplicada II.) Francisco J. Sáez-Fernández () (Universidad de Granada. Dpto. Economía Aplicada.) Francisco González-Gómez () (Universidad de Granada. Dpto. Economía Aplicada.)
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Quality is a dimension of water services that has been repeatedly omitted in the study of performance of water utilities. In this paper, we make use of Data Envelopment Analysis techniques (DEA) to compute both conventional quantity-based and quality-adjusted indicators of technical efficiency for a sample of Spanish water utilities. The key assumptions are that a lack of quality (bad quality) can be regarded as a bad output, and the existence of a trade-off between quantity and quality. Our main results indicate that quality matters in measuring technical performance, the difference between conventional and quality-adjusted evaluations representing the opportunity cost of maintaining quality. Averages and distribution functions significantly differ between both assessments of performance, although water utilities do not seem to rank differently.
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Paper provided by Faculty of Economics and Business (University of Granada) in its series FEG Working Paper Series with number
07/04.
Find related papers by JEL classification: L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General L95 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Gas Utilities; Pipelines; Water Utilities C61 - Mathematical and Quantitative Methods - - Mathematical Methods and Programming - - - Optimization Techniques; Programming Models; Dynamic Analysis
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