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Economies of scale in Peru’s water and sanitation sector

Author

Listed:
  • Augusto C. Mercadier

    (ERAS and Universidad Nacional de La Plata)

  • Walter A. Cont

    (FIEL and Universidad Nacional de La Plata)

  • Gustavo Ferro

    (Universidad del CEMA (UCEMA) and CONICET)

Abstract

This paper quantifies economies of scale in Peru’s water and sanitation (W&S) sector based on a five-year panel (2006–2010) that examines 39 water services providers. Our findings highlight the lack of economies of scale in the Peruvian W&S sector as a whole. Cost savings are possible through water volume increases (Economies of Production Density) and a higher provision density (Economies of Customer Density), but not via an increase in the number of served municipalities (overall Economies of Scale). Some agglomerations are possible, yielding cost reductions of up to 9 %.

Suggested Citation

  • Augusto C. Mercadier & Walter A. Cont & Gustavo Ferro, 2016. "Economies of scale in Peru’s water and sanitation sector," Journal of Productivity Analysis, Springer, vol. 45(2), pages 215-228, April.
    • Handle: RePEc:kap:jproda:v:45:y:2016:i:2:d:10.1007_s11123-016-0468-0
    DOI: 10.1007/s11123-016-0468-0
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    More about this item

    Keywords

    Economies of scale; Water and sanitation; Peru; Econometrics;
    All these keywords.

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • L95 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Gas Utilities; Pipelines; Water Utilities

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