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Retornos a escala en agua y saneamiento: estimaciones para América Latina
[Returns to scale in water and sanitation: estimates for Latin Amercia]

Author

Listed:
  • Ferro, Gustavo
  • Lentini, Emilio
  • Mercadier, Augusto
  • Romero, Carlos A.

Abstract

In the whole world there are strong discussions on how to yield a more equitable access and a more efficient provision. One issue linked to efficiency is the achievement of scale economies in the industry, and the optimal dimension of water and sanitation providers. Changes in the industrial structure of the sector, through mergers in highly atomized services, the splitting of very concentrated ones, or the property discussion (private versus public) had been hotly debated in different countries. Many times, the decisions had politicized because of the social complexity of the sector. In this study, we aim to estimate the presence of returns to scale, exploiting a database of water and sanitation providers in Latin America. Public policy consequences are direct: if those returns to scale do exist, and the sector is not taking advantage of them, the agglomeration of small providers can eventually save resources which are useful to solve the coverage shortages and the insufficient access for the poor in the region. The scale economies study adds a technical argument to the discussion, because the prescription could be, as it happens to suggest the study, of the convenience of agglomerating small providers to reduce unit costs.

Suggested Citation

  • Ferro, Gustavo & Lentini, Emilio & Mercadier, Augusto & Romero, Carlos A., 2010. "Retornos a escala en agua y saneamiento: estimaciones para América Latina
    [Returns to scale in water and sanitation: estimates for Latin Amercia]
    ," MPRA Paper 20324, University Library of Munich, Germany, revised Jan 2010.
  • Handle: RePEc:pra:mprapa:20324
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    File URL: https://mpra.ub.uni-muenchen.de/20324/1/MPRA_paper_20324.pdf
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    References listed on IDEAS

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    Cited by:

    1. Carvalho, Pedro & Marques, Rui Cunha & Berg, Sanford, 2012. "A meta-regression analysis of benchmarking studies on water utilities market structure," Utilities Policy, Elsevier, vol. 21(C), pages 40-49.

    More about this item

    Keywords

    returns to scale; economies of scale; water and sanitation;

    JEL classification:

    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L95 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Gas Utilities; Pipelines; Water Utilities
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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