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Does market concentration affect prices in the urban water industry?

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Listed:
  • Germà Bel
  • Francisco González-Gómez
  • Andrés J Picazo-Tadeo

Abstract

This paper analyzes the relationship between market concentration in the private segment of the water industry and water prices with a sample of municipalities located in the Southern Spanish region of Andalusia. In doing so, several Heckman sample selection models are estimated with the main finding being that market concentration increases the price of water for residential use charged by private companies. The main policy recommendation is that urban water service privatization must be accompanied by the appropriate regulatory and institutional frameworks to promote competition among businesses and monitor water pricing.

Suggested Citation

  • Germà Bel & Francisco González-Gómez & Andrés J Picazo-Tadeo, 2015. "Does market concentration affect prices in the urban water industry?," Environment and Planning C, , vol. 33(6), pages 1546-1565, December.
    • Handle: RePEc:sae:envirc:v:33:y:2015:i:6:p:1546-1565
    DOI: 10.1177/0263774X15614144
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    9. Germà Bel & Francisco González-Gómez & Andrés J. Picazo-Tadeo, 2013. "The dynamics of privatization and regulation of water services: a comparative study of two Spanish regions," International Journal of Water Resources Development, Taylor & Francis Journals, vol. 29(3), pages 373-384, September.
    10. Eshien Chong & Freddy Huet & Stéphane Saussier & Faye Steiner, 2006. "Public-Private Partnerships and Prices: Evidence from Water Distribution in France," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 29(1), pages 149-169, September.
    11. Germa Bel & Anton Costas, 2006. "Do Public Sector Reforms Get Rusty? Local Privatization in Spain," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 9(1), pages 1-24.
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    13. Andrés Picazo-Tadeo & Francisco González-Gómez & Jorge Wanden-Berghe & Alberto Ruiz-Villaverde, 2012. "Do ideological and political motives really matter in the public choice of local services management? Evidence from urban water services in Spain," Public Choice, Springer, vol. 151(1), pages 215-228, April.
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    Cited by:

    1. Andrés J. Picazo-Tadeo & Francisco González-Gómez & Marta Suárez-Varela, 2020. "Electoral opportunism and water pricing with incomplete transfer of control rights," Local Government Studies, Taylor & Francis Journals, vol. 46(6), pages 1015-1038, November.
    2. Suárez-Varela, Marta & Martínez-Espiñeira, Roberto & González-Gómez, Francisco, 2015. "An analysis of the price escalation of non-linear water tariffs for domestic uses in Spain," Utilities Policy, Elsevier, vol. 34(C), pages 82-93.
    3. Miguel A. García-Rubio & Cecilia Tortajada & Francisco González-Gómez, 2016. "Privatising Water Utilities and User Perception of Tap Water Quality: Evidence from Spanish Urban Water Services," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 30(1), pages 315-329, January.
    4. Ruiz-Villaverde, Alberto & González-Gómez, Francisco & J. Picazo- Tadeo, Andrés, 2015. "The privatisation of urban water services: theory and empirical evidence in the case of Spain," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 31, pages 157-174.
    5. Lozano Navarro, Francisco-Javier, 2021. "Análisis de la concentración de mercado en la actividad inmobiliaria de Santiago [Market concentration of real estate in Santiago]," MPRA Paper 118262, University Library of Munich, Germany.
    6. González-Gómez, Francisco & García-Rubio, Miguel A. & González-Martínez, Jesús, 2014. "Beyond the public–private controversy in urban water management in Spain," Utilities Policy, Elsevier, vol. 31(C), pages 1-9.
    7. María A. García-Valiñas, 2018. "Spain," Post-Print hal-03191536, HAL.
    8. Albalate, Daniel & Bel, Germà & González-Gómez, Francisco & Picazo-Tadeo, Andrés J., 2022. "Legislative reforms and market dynamics in the provision of urban water service by private contract operators in Spain," Utilities Policy, Elsevier, vol. 74(C).

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