Does Service Quality Matter In Measuring Performance Of Water Utilities?
AbstractQuality 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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Bibliographic InfoPaper provided by Faculty of Economics and Business (University of Granada) in its series FEG Working Paper Series with number 07/04.
Length: 32 pages
Date of creation: 22 Nov 2007
Date of revision:
water utilities; quality; Data Envelopment Analysis.;
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