Roberto Martínez-Espiñeira (St. Francis Xavier University) Maria A. García-Valiñas (University of Oviedo) Francisco González-Gómez (University of Granada)
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In this paper we try to explain differences in the average price of domestic water supply services in Spain, paying special attention to the effects of privatisation of the service on price levels. We base our empirical analysis on the application of a `treatment effects' model on a sample of 53 major urban municipalities. This model accounts for the fact that municipalities do not randomly assign themselves between a group using strictly public ownership and management and a group where all or part of the service has been delegated to a private firm. We find that, once this endogeneity is taken into account, there seems to be a positive and significant effect of privatisation on water price levels.
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Paper provided by Faculty of Economics and Business (University of Granada) in its series FEG Working Paper Series with number
07/05.
Find related papers by JEL classification: C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Boundaries of Public and Private Enterprise; Privatization; Contracting Out L95 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Gas Utilities; Pipelines; Water Utilities
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