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Cost of Water Delivery Systems: Specification and Ownership Effects


  • Teeples, Ronald K
  • Glyer, David


Three cost models of water delivery systems are replicated as alternative specifications of a general form. A dual cost function methodology is followed, usin g firm-specific data and ownership proxies, to trace the effects that numerous technical constraints and variable specifications have on t he relative efficiency of firms by ownership type. Results show that apparent overall efficiency differences reduce to insignificance as s pecification improves. This partly explains why past studies of overa ll efficiency of ownership forms have yielded mixed, and in some inst ances, unreliable results. The partial efficiency results point to fu ture public-private research methods. Copyright 1987 by MIT Press.

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  • Teeples, Ronald K & Glyer, David, 1987. "Cost of Water Delivery Systems: Specification and Ownership Effects," The Review of Economics and Statistics, MIT Press, vol. 69(3), pages 399-408, August.
  • Handle: RePEc:tpr:restat:v:69:y:1987:i:3:p:399-408

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    References listed on IDEAS

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    8. R. W. Hafer, 1985. "Monetary stabilization policy: evidence from money demand forecasts," Review, Federal Reserve Bank of St. Louis, issue May, pages 21-26.
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    Cited by:

    1. Mbuvi, Dorcas & Tarsim, Achraf, 2011. "Managerial ownership and urban water utilities efficiency in Uganda," MERIT Working Papers 036, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    2. Bozec, Richard, 2004. "L’analyse comparative de la performance entre les entreprises publiques et les entreprises privées : le problème de mesure et son impact sur les résultats," L'Actualité Economique, Société Canadienne de Science Economique, vol. 80(4), pages 619-654, Décembre.
    3. Wallsten, Scott & Kosec, Katrina, 2008. "The effects of ownership and benchmark competition: An empirical analysis of U.S. water systems," International Journal of Industrial Organization, Elsevier, vol. 26(1), pages 186-205, January.
    4. François Destandau & Serge Garcia, 2014. "Service quality, scale economies and ownership: an econometric analysis of water supply costs," Journal of Regulatory Economics, Springer, vol. 46(2), pages 152-182, October.
    5. World Bank, 2006. "Poverty, Growth, and Environment in Brazil : Spatial Insights for Policymaking," World Bank Other Operational Studies 12852, The World Bank.
    6. Francisco González Gómez & Miguel Angel García Rubio, 2008. "Efficiency in the management of urban water services. What have we learned after four decades of research?," Hacienda Pública Española, IEF, vol. 185(2), pages 39-67, July.
    7. Kole, Stacey R & Mulherin, J Harold, 1997. "The Government as a Shareholder: A Case from the United States," Journal of Law and Economics, University of Chicago Press, vol. 40(1), pages 1-22, April.
    8. Bhattacharyya, Arunava & Harris, Thomas R. & Narayanan, Rangesan & Raffiee, Kambiz, 1995. "Specification and estimation of the effect of ownership on the economic efficiency of the water utilities," Regional Science and Urban Economics, Elsevier, vol. 25(6), pages 759-784, December.
    9. Valeria Cosmo, 2013. "Ownership, Scale Economies and Efficiency in the Italian Water Sector," Journal of Industry, Competition and Trade, Springer, vol. 13(3), pages 399-415, September.
    10. 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.
    11. Alessandro Marra, 2006. "Mixed Public-Private Enterprises in Europe: Economic Theory and an Empirical Analysis of Italian Water Utilities," Bruges European Economic Research Papers 4, European Economic Studies Department, College of Europe.
    12. Willner, Johan, 2001. "Ownership, efficiency, and political interference," European Journal of Political Economy, Elsevier, vol. 17(4), pages 723-748, November.
    13. 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).
    14. Roberto Mosheim, 2014. "Under pressure: community water systems in the United States—a production model with water quality and organization type effects," Journal of Productivity Analysis, Springer, vol. 42(3), pages 277-292, December.
    15. Paola Fabbri & Giovanni Fraquelli, 2000. "Costs and Structure of Technology in the Italian Water Industry," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 27(1), pages 65-82, March.
    16. Juan-Pablo Montero, 2005. "A Model of Final Offer Arbitration in Regulation," Journal of Regulatory Economics, Springer, vol. 28(1), pages 23-46, July.
    17. Bae, Suho, 2007. "Explaining Geographical Differences in Water Prices: Do Institutional Factors Really Matter?," The Review of Regional Studies, Southern Regional Science Association, vol. 37(2), pages 207-250.
    18. Abbott, Malcolm & Cohen, Bruce, 2009. "Productivity and efficiency in the water industry," Utilities Policy, Elsevier, vol. 17(3-4), pages 233-244, September.
    19. Valeria Di Cosmo, 2011. "Are the Consumers Always Ready to Pay? A Quasi-Almost Ideal Demand System for the Italian Water Sector," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 25(2), pages 465-481, January.
    20. Johnstone, Nick & Wood, Libby & Hearne, Robert R., 1999. "The Regulation of Private Sector Participation in Urban Water Supply and Sanitation: Realising Social and Environmental Objectives in Developing Countries," Discussion Papers 24142, International Institute for Environment and Development, Environmental Economics Programme.
    21. Sabbioni, Guillermo, 2008. "Efficiency in the Brazilian sanitation sector," Utilities Policy, Elsevier, vol. 16(1), pages 11-20, March.
    22. Tim Coelli & Shannon Walding, 2005. "Performance Measurement in the Australian Water Supply Industry," CEPA Working Papers Series WP012005, School of Economics, University of Queensland, Australia.

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