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Economies of scale in Peru’s water and sanitation sector

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  • Augusto Mercadier

  • Walter Cont

  • Gustavo Ferro

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 %. Copyright Springer Science+Business Media New York 2016

Suggested Citation

  • Augusto Mercadier & Walter 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:p:215-228
    DOI: 10.1007/s11123-016-0468-0
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    Cited by:

    1. Maziotis, Alexandros & Villegas, Andrés & Molinos-Senante, María & Sala-Garrido, Ramon, 2020. "Impact of external costs of unplanned supply interruptions on water company efficiency: Evidence from Chile," Utilities Policy, Elsevier, vol. 66(C).

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    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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