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Sewer plant operating efficiency, patronage, and competition

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  • Lawrence Southwick

    (Department of Finance and Managerial Economics, University at Buffalo, Town of Amherst, NY, USA)

Abstract

Sewer treatment plants in New York State, US, are studied for efficiency and economies of scale. Substantial economies of scale are found. The degree of inefficiency for each plant is then computed and this inefficiency is related to the degree of market concentration in that county. The result found is that greater concentration induces a reduction in efficiency. This is argued to be consistent with the Tiebout Hypothesis. Copyright © 2004 John Wiley & Sons, Ltd.

Suggested Citation

  • Lawrence Southwick, 2005. "Sewer plant operating efficiency, patronage, and competition," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 26(1), pages 1-13.
  • Handle: RePEc:wly:mgtdec:v:26:y:2005:i:1:p:1-13
    DOI: 10.1002/mde.1185
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    File URL: http://hdl.handle.net/10.1002/mde.1185
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    References listed on IDEAS

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    3. Hochman, Oded & Pines, David & Thisse, Jacques-Francois, 1995. "On the Optimal Structure of Local Governments," American Economic Review, American Economic Association, vol. 85(5), pages 1224-1240, December.
    4. Wyckoff, Paul Gary, 1991. "Testing Bureaucratic Influence on Local School Expenditures by Comparing Survey and Expenditure Data," The Review of Economics and Statistics, MIT Press, vol. 73(2), pages 331-335, May.
    5. Santerre, Rexford E, 1990. "A Test of Executive Behavior in the Local Public Sector," The Review of Economics and Statistics, MIT Press, vol. 72(3), pages 546-550, August.
    6. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
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