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Identifying scale economies for different types of water supply organizations in Japan

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  • Takuya Urakami

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Abstract

Although water supply systems include activities such as water intake; water purification; and water distribution, many water supply organizations are not always equipped with all three activities. In fact, Japan has two types of water companies: one that operates water intake and water purification (type 1); and the other which mainly operates water distribution (type 2). Many previous studies have attempted to identify scale economies for water supply organizations, but have failed to take into account which water supply systems operate. In this analysis we categorize Japanese water supply organizations into three types: type 1 - which operates water intake and water purification; type 2a - which not only operates water distribution, but also operates water intake and water purification; and type 2b - which operates water distribution, but purchases water from type 1 companies. After that, we estimate scale economies for each type of water supply organization using translog cost function. Furthermore, we take into account their water sources, especially type 1 and type 2a, because we consider that differences of water sources might affect the cost structure of water supply systems.

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Bibliographic Info

Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa05p370.

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Date of creation: Aug 2005
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Handle: RePEc:wiw:wiwrsa:ersa05p370

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  1. Kim, H Youn, 1987. "Economies of Scale in Multi-product Firms: An Empirical Analysis," Economica, London School of Economics and Political Science, London School of Economics and Political Science, vol. 54(214), pages 185-206, May.
  2. Fumitoshi Mizutani & Takuya Urakami, 2001. "articles: Identifying network density and scale economies for Japanese water supply organizations," Papers in Regional Science, Springer, Springer, vol. 80(2), pages 211-230.
  3. Serge Garcia & Alban Thomas, 2001. "The Structure of Municipal Water Supply Costs: Application to a Panel of French Local Communities," Journal of Productivity Analysis, Springer, Springer, vol. 16(1), pages 5-29, July.
  4. Bhattacharyya, Arunava & Harris, Thomas R. & Narayanan, Rangesan & Raffiee, Kambiz, 1995. "Specification and estimation of the effect of ownership on the economic efficiency of the water utilities," Regional Science and Urban Economics, Elsevier, Elsevier, vol. 25(6), pages 759-784, December.
  5. Arunava Bhattacharyya & Elliott Parker & Kambiz Raffiee, 1994. "An Examination of the Effect of Ownership on the Relative Efficiency of Public and Private Water Utilities," Land Economics, University of Wisconsin Press, University of Wisconsin Press, vol. 70(2), pages 197-209.
  6. Youn Kim, H. & Clark, Robert M., 1988. "Economies of scale and scope in water supply," Regional Science and Urban Economics, Elsevier, Elsevier, vol. 18(4), pages 479-502, November.
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Cited by:
  1. 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, DIW Berlin, German Institute for Economic Research 1187, DIW Berlin, German Institute for Economic Research.

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