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Corrigendum to "The appropriateness of the poolability assumption for multiproduct technologies: Evidence from the English water and sewerage utilities" [Int. J. Prod. Econ. 130 (2011) 112-117]

Author

Listed:
  • Bottasso, Anna
  • Conti, Maurizio
  • Piacenza, Massimiliano
  • Vannoni, Davide

Abstract

The empirical literature on the cost structure of multiproduct firms (e.g., public utilities providing in combination gas, water, and electricity) traditionally assumes a common technology across different products and stages of production, letting the issue of poolability unexplored. The appropriateness of this assumption is tested here by estimating a general cost function for samples of UK specialized and sewerage-diversified water utilities. The results show the existence of both aggregate scale economies and diseconomies of scope; more interestingly, the hypothesis that the two groups of water companies share the same technological parameters is rejected. Given the implications of this finding in terms of optimal industry configuration and possible restructuring policies (e.g., mergers and/or divestitures), our test suggests caution in pooling samples when undertaking empirical studies on data which refer to multiproduct technologies.
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Suggested Citation

  • Bottasso, Anna & Conti, Maurizio & Piacenza, Massimiliano & Vannoni, Davide, 2011. "Corrigendum to "The appropriateness of the poolability assumption for multiproduct technologies: Evidence from the English water and sewerage utilities" [Int. J. Prod. Econ. 130 (2011) 112-117]," International Journal of Production Economics, Elsevier, vol. 131(2), pages 763-763, June.
    • Handle: RePEc:eee:proeco:v:131:y:2011:i:2:p:763-763
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    Cited by:

    1. Pointon, Charlotte & Matthews, Kent, 2016. "Dynamic efficiency in the English and Welsh water and sewerage industry," Omega, Elsevier, vol. 58(C), pages 86-96.
    2. Abrate, Graziano & Erbetta, Fabrizio & Fraquelli, Giovanni & Vannoni, Davide, 2016. "Bet big on doubles, bet smaller on triples. Exploring scope economies in multi-service passenger transport companies," Transport Policy, Elsevier, vol. 52(C), pages 81-88.
    3. María Molinos-Senante & Alexandros Maziotis, 2019. "Cost Efficiency of English and Welsh Water Companies: a Meta-Stochastic Frontier Analysis," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 33(9), pages 3041-3055, July.
    4. Molinos-Senante, María & Porcher, Simon & Maziotis, Alexandros, 2017. "Impact of regulation on English and Welsh water-only companies: an input-distance function approach," LSE Research Online Documents on Economics 82972, London School of Economics and Political Science, LSE Library.
    5. Pointon, Charlotte & Matthews, Kent, 2016. "Reprint of: Dynamic efficiency in the English and Welsh water and sewerage industry," Omega, Elsevier, vol. 60(C), pages 98-108.
    6. Molinos-Senante, María & Maziotis, Alexandros & Sala-Garrido, Ramón, 2020. "Changes in the total costs of the English and Welsh water and sewerage industry: The decomposed effect of price and quantity inputs on efficiency," Utilities Policy, Elsevier, vol. 66(C).
    7. Mocholi-Arce, Manuel & Sala-Garrido, Ramon & Molinos-Senante, Maria & Maziotis, Alexandros, 2021. "Performance assessment of water companies: A metafrontier approach accounting for quality of service and group heterogeneities," Socio-Economic Planning Sciences, Elsevier, vol. 74(C).
    8. Anna Bottasso & Maurizio Conti, 2021. "Economie di integrazione verticale ed economie di scopo nel settore idrico e fognario: alcune considerazioni alla luce dell?evidenza empirica internazionale," ECONOMIA PUBBLICA, FrancoAngeli Editore, vol. 2021(3), pages 89-128.
    9. Maria Molinos-Senante & Alexandros Maziotis, 2021. "Productivity growth, economies of scale and scope in the water and sewerage industry: The Chilean case," PLOS ONE, Public Library of Science, vol. 16(5), pages 1-16, May.
    10. Sala-Garrido, Ramon & Mocholi-Arce, Manuel & Molinos-Senante, Maria & Maziotis, Alexandros, 2021. "Assessing the marginal cost of reducing greenhouse gas emissions in the English and Welsh water and sewerage industry: A parametric approach," Utilities Policy, Elsevier, vol. 70(C).
    11. Humberto Brea-Solis & Sergio Perelman & David Saal, 2017. "Regulatory incentives to water losses reduction: the case of England and Wales," Journal of Productivity Analysis, Springer, vol. 47(3), pages 259-276, June.
    12. Thomas P. Triebs & David S. Saal & Pablo Arocena & Subal C. Kumbhakar, 2016. "Estimating economies of scale and scope with flexible technology," Journal of Productivity Analysis, Springer, vol. 45(2), pages 173-186, April.
    13. Brho, Mazen & Jazairy, Amer & Glassburner, Aaron V., 2025. "The finance of cybersecurity: Quantitative modeling of investment decisions and net present value," International Journal of Production Economics, Elsevier, vol. 279(C).
    14. Graziano Abrate & Fabrizio Erbetta & Giovanni Fraquelli & Davide Vannoni, 2014. "Cost function estimation of multi-service firms. Evidence from the passenger transport industry," Carlo Alberto Notebooks 380, Collegio Carlo Alberto.
    15. Amor, Tawfik Ben, . "The generalised translog cost function to estimate tariffs for potable water: The case of Tunisia," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 17(4).
    16. Maximilian Koppenberg, 2023. "Markups, organic agriculture and downstream concentration at the example of European dairy farmers," Agricultural Economics, International Association of Agricultural Economists, vol. 54(2), pages 161-178, March.
    17. Tian, Yuzhen & Goh, Kim Huat & See, Kok Fong, 2025. "Technical efficiency analysis of China's water sector: A technology heterogeneity perspective," Utilities Policy, Elsevier, vol. 95(C).

    More about this item

    JEL classification:

    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
    • L95 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Gas Utilities; Pipelines; Water Utilities

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