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Does Private Management Of Water Supply Services Really Increase Prices? An Empirical Analysis

Author

Listed:
  • Roberto Martínez-Espiñeira

    (St. Francis Xavier University)

  • Maria A. García-Valiñas

    (University of Oviedo)

  • Francisco González-Gómez

    (University of Granada)

Abstract

In this paper we try to explain differences in the average price of domestic water supply services in Spain, paying special attention to the effects of privatisation of the service on price levels. We base our empirical analysis on the application of a `treatment effects' model on a sample of 53 major urban municipalities. This model accounts for the fact that municipalities do not randomly assign themselves between a group using strictly public ownership and management and a group where all or part of the service has been delegated to a private firm. We find that, once this endogeneity is taken into account, there seems to be a positive and significant effect of privatisation on water price levels.

Suggested Citation

  • Roberto Martínez-Espiñeira & Maria A. García-Valiñas & Francisco González-Gómez, 2007. "Does Private Management Of Water Supply Services Really Increase Prices? An Empirical Analysis," FEG Working Paper Series 07/05, Faculty of Economics and Business (University of Granada).
  • Handle: RePEc:gra:fegper:07/05
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    File URL: http://www.ugr.es/~teoriahe/RePEc/gra/fegper/FEGWP507.pdf
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    References listed on IDEAS

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    Cited by:

    1. Ana Elena IOSIF, 2014. "Public - private interdependence: an effective tool in water supply services," EuroEconomica, Danubius University of Galati, issue 2(33), pages 19-35, November.

    More about this item

    Keywords

    Urban water services; privatization; water prices;

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • L95 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Gas Utilities; Pipelines; Water Utilities

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