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Tradeoff Between Economies Of Size In Treatment And Diseconomies Of Distribution For Rural Water Systems

  • Boisvert, Richard N.
  • Schmit, Todd M.

This paper outlines a method to determine the tradeoff between economies of size in water treatment and diseconomies of distribution. Cost equations are estimated for several treatment technologies and distribution extensions. Empirical results are used to identify optimal system size where average total costs are minimized. Regardless of treatment, most costs are due to distribution. As water systems expand service territories, only in the most densely populated areas would remaining economies of size in treatment outweigh the diseconomies in distribution.

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File URL: http://purl.umn.edu/31572
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Article provided by Northeastern Agricultural and Resource Economics Association in its journal Agricultural and Resource Economics Review.

Volume (Year): 26 (1997)
Issue (Month): 2 (October)
Pages:

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Handle: RePEc:ags:arerjl:31572
Contact details of provider: Web page: http://www.narea.org/

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  1. Boisvert, Richard N. & Schmit, Todd M., 1996. "Distribution Of Community Water Systems Across The United States With Emphasis On Size, Water Production, Ownership, And Treatment," Research Bulletins 122989, Cornell University, Department of Applied Economics and Management.
  2. Schmit, Todd M. & Boisvert, Richard N., 1996. "Rural Utilities Service's Water and Waste Disposal Loan and Grant Program and its Contribution to Small Public Water System Improvements in New York State," Research Bulletins 122990, Cornell University, Department of Applied Economics and Management.
  3. Christensen, Laurits R & Greene, William H, 1976. "Economies of Scale in U.S. Electric Power Generation," Journal of Political Economy, University of Chicago Press, vol. 84(4), pages 655-76, August.
  4. Ford, J L & Warford, J J, 1969. "Cost Functions for the Water Industry," Journal of Industrial Economics, Wiley Blackwell, vol. 18(1), pages 53-63, November.
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