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Gaming in a benchmarking environment. A non-parametric analysis of benchmarking in the water sector

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De Witte, Kristof
Marques, Rui

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Abstract

This paper discusses the use of benchmarking in general and its application to the drinking water sector. It systematizes the various classifications on performance measurement, discusses some of the pitfalls of benchmark studies and provides some examples of benchmarking in the water sector. After presenting in detail the institutional framework of the water sector of the Belgian region of Flanders (without benchmarking experiences), Wallonia (recently started a public benchmark) and the Netherlands (introduced already in 1997 a public benchmark), we non-parametrically measure the productivity gains by the use of a dynamic Malmquist index. The three regions, each at a different stage of the benchmarking circle, exhibit different performance trends. The ‘carrot’ and the ‘stick’ of benchmarking seem to offer an effective incentive to trigger performance. In addition, the Malmquist decompositions provide some evidence on the ‘gaming’ of the stakeholders by the water utilities.

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Publisher Info
Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 14679.

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Date of creation: 12 Apr 2009
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Handle: RePEc:pra:mprapa:14679

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Related research
Keywords: Benchmarking; gaming; Malmquist decomposition; regulation; water sector.;

Find related papers by JEL classification:
C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - Semiparametric and Nonparametric Methods
L95 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Gas Utilities; Pipelines; Water Utilities

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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.:
  1. Cazals, Catherine & Florens, Jean-Pierre & Simar, Leopold, 2002. "Nonparametric frontier estimation: a robust approach," Journal of Econometrics, Elsevier, vol. 106(1), pages 1-25, January. [Downloadable!] (restricted)
  2. Kristof De Witte & Elbert Dijkgraaf, 2007. "Mean and Bold?," Tinbergen Institute Discussion Papers 07-092/3, Tinbergen Institute. [Downloadable!]
  3. Jamasb, Tooraj & Nillesen, Paul & Pollitt, Michael, 2004. "Strategic behaviour under regulatory benchmarking," Energy Economics, Elsevier, vol. 26(5), pages 825-843, September. [Downloadable!] (restricted)
  4. Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November. [Downloadable!] (restricted)
  5. Jamasb, Tooraj & Nillesen, Paul & Pollitt, Michael, 2003. "Gaming the Regulator: A Survey," The Electricity Journal, Elsevier, vol. 16(10), pages 68-80, December. [Downloadable!] (restricted)
  6. Marques, Rui Cunha, 2006. "A yardstick competition model for Portuguese water and sewerage services regulation," Utilities Policy, Elsevier, vol. 14(3), pages 175-184, September. [Downloadable!] (restricted)
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