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Public Versus Private Water Utilities: Empirical Evidence for Brazilian Companies

Author

Listed:
  • Tito Belchior Moreira

    (Catholic University of Brasília)

  • Geraldo da Silva Souza

    (University of Brasília)

  • Ricardo Coelho Faria

    (Catholic University of Brasília)

Abstract

This paper compares the technical efficiency of Brazilian public and private companies in water supply. To measure efficiency a stochastic production frontier model is estimated using two competitive distributions for the inefficiency error component: truncated normal and exponential. The exponential distribution showed a superior fit and was used to assess differences in technical efficiency between public and private companies. The statistical results show that private companies are only marginally more efficient than public ones.

Suggested Citation

  • Tito Belchior Moreira & Geraldo da Silva Souza & Ricardo Coelho Faria, 2005. "Public Versus Private Water Utilities: Empirical Evidence for Brazilian Companies," Economics Bulletin, AccessEcon, vol. 8(2), pages 1-7.
    • Handle: RePEc:ebl:ecbull:eb-05h00001
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    References listed on IDEAS

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    Cited by:

    1. Byrnes, Joel & Crase, Lin & Dollery, Brian & Villano, Renato, 2010. "The relative economic efficiency of urban water utilities in regional New South Wales and Victoria," Resource and Energy Economics, Elsevier, vol. 32(3), pages 439-455, August.
    2. Parida, Meenakshi & Madheswaran, S., 2021. "Does ownership matter? Empirical evidence from the performance of Indian state and private coal mining companies," Resources Policy, Elsevier, vol. 74(C).
    3. Mbuvi, Dorcas & Tarsim, Achraf, 2011. "Managerial ownership and urban water utilities efficiency in Uganda," MERIT Working Papers 2011-036, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    4. Ferro, Gustavo & Lentini, Emilio J. & Mercadier, Augusto C. & Romero, Carlos A., 2013. "Eficiencia en la prestación de agua y saneamiento y su vinculación con regiones, propiedad e independencia de los prestadores en Brasil [Efficiency in water and sanitation providers and its links w," MPRA Paper 48247, University Library of Munich, Germany.
    5. Das, Amarendra, 2012. "Who extracts minerals more efficiently—Public or private firms? A study of Indian mining industry," Journal of Policy Modeling, Elsevier, vol. 34(5), pages 755-766.
    6. Peci, Alketa & D’Assunção, Márcio Leite & Holperin, Michelle Moretzsohn & de Souza, Celso Florêncio, 2017. "Regulation inside government: The challenges of regulating a government-owned utility," Utilities Policy, Elsevier, vol. 49(C), pages 61-70.
    7. Ferro, Gustavo & Lentini, Emilio J & Mercadier, Augusto & Brenner, Federica, 2014. "Eficiencia energética en el sector de agua y saneamiento: estimaciones utilizando una función de requerimientos de insumo [Energy efficiency in the water and sanitarion sector: an input requirement," MPRA Paper 58480, University Library of Munich, Germany.
    8. Marta Suárez-Varela & María los Ángeles García-Valiñas & Francisco González-Gómez & Andrés J Picazo-Tadeo, 2017. "Ownership and Performance in Water Services Revisited: Does Private Management Really Outperform Public?," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 31(8), pages 2355-2373, June.
    9. Barbosa, Alexandro & Lima, Severino Cesário de & Brusca, Isabel, 2016. "Governance and efficiency in the Brazilian water utilities: A dynamic analysis in the process of universal access," Utilities Policy, Elsevier, vol. 43(PA), pages 82-96.
    10. Roberto Martínez-Espiñeira & Maria A. García-Valiñas & Francisco González-Gómez, 2009. "Does Private Management of Water Supply Services Really Increase Prices? An Empirical Analysis in Spain," Urban Studies, Urban Studies Journal Limited, vol. 46(4), pages 923-945, April.
    11. Claudia Marcela Granados Vergara, 2008. "¿Contribuyen las reformas al progreso social?, el caso de los servicios de acueducto y alcantarillado y la mortalidad infantil en Colombia 1990-2004," Documentos CEDE 4738, Universidad de los Andes, Facultad de Economía, CEDE.
    12. Tourinho, Marco & Santos, Paulo Rosa & Pinto, Francisco Taveira & Camanho, Ana S., 2022. "Performance assessment of water services in Brazilian municipalities: An integrated view of efficiency and access," Socio-Economic Planning Sciences, Elsevier, vol. 79(C).
    13. Cuadrado-Ballesteros, Beatriz & García-Sánchez, Isabel-María & Prado-Lorenzo, José-Manuel, 2013. "Effect of modes of public services delivery on the efficiency of local governments: A two-stage approach," Utilities Policy, Elsevier, vol. 26(C), pages 23-35.
    14. Meenakshi Parida & S. Madheswaran, 2021. "Effect of firm ownership on productivity: empirical evidence from the Indian mining industry," Mineral Economics, Springer;Raw Materials Group (RMG);Luleå University of Technology, vol. 34(1), pages 87-103, April.
    15. Haug, Peter, 2007. "Local Government Control and Efficiency of the Water Industry: An Empirical Analysis of Water Suppliers in East Germany," IWH Discussion Papers 3/2007, Halle Institute for Economic Research (IWH).
    16. Francisco González-Gómez & Miguel García‐Rubio & Francisco Alcalá-Olid & M. Ortega-Díaz, 2013. "Outsourcing and Efficiency in the Management of Rural Water Services," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 27(3), pages 731-747, February.
    17. Miguel A. García-Rubio & Francisco González-Gómez & Jorge Guardiola, 2009. "Performance and ownership in the governance of urban water," FEG Working Paper Series 09/03, Faculty of Economics and Business (University of Granada).
    18. Ferro, Gustavo & Lentini, Emilio J. & Mercadier, Augusto C. & Romero, Carlos A., 2014. "Efficiency in Brazil's water and sanitation sector and its relationship with regional provision, property and the independence of operators," Utilities Policy, Elsevier, vol. 28(C), pages 42-51.
    19. Picazo-Tadeo, Andrés J. & Sáez-Fernández, Francisco J. & González-Gómez, Francisco, 2008. "Assesing Performance in the Management of the Urban Water Cycle," Efficiency Series Papers 2008/01, University of Oviedo, Department of Economics, Oviedo Efficiency Group (OEG).
    20. Rachida El Mehdi & Christian M. Hafner, 2021. "A Starting Note: Panel Stochastic Frontier Analysis with Dependent Error Terms," International Econometric Review (IER), Econometric Research Association, vol. 13(2), pages 24-40, June.
    21. de Souza Pereira, Mariana & Magalhães Filho, Fernando Jorge Corrêa & de Morais Lima, Priscila & Tabak, Benjamin Miranda & Constantino, Michel, 2022. "Sanitation and water services: Who is the most efficient provider public or private? Evidences for Brazil," Socio-Economic Planning Sciences, Elsevier, vol. 79(C).
    22. Granados, Claudia & Sánchez, Fabio, 2014. "Water Reforms, Decentralization and Child Mortality in Colombia, 1990–2005," World Development, Elsevier, vol. 53(C), pages 68-79.

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    JEL classification:

    • H0 - Public Economics - - General
    • H0 - Public Economics - - General

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