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The effects of subsidies on the cost structure of Japanese water supply organizations

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  • Takuya Urakami

Abstract

The purpose of this study is to identify the effects of subsidies on the cost structure of Japanese water supply organizations by estimating the translog cost function. Geographical conditions, such as network density and water sources, are also controlled in this model. The empirical results indicate that low network density, lack of own water sources and increasing subsidies lead to higher costs. It has also been found that subsidies have caused wasteful use of labor, capital and other input factors, and have diminished scale economies.

Suggested Citation

  • Takuya Urakami, 2004. "The effects of subsidies on the cost structure of Japanese water supply organizations," ERSA conference papers ersa04p260, European Regional Science Association.
    • Handle: RePEc:wiw:wiwrsa:ersa04p260
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    File URL: https://www-sre.wu.ac.at/ersa/ersaconfs/ersa04/PDF/260.pdf
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    References listed on IDEAS

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    1. Fumitoshi Mizutani & Takuya Urakami, 2001. "articles: Identifying network density and scale economies for Japanese water supply organizations," Papers in Regional Science, Springer;Regional Science Association International, vol. 80(2), pages 211-230.
    2. Kim, Moshe & Spiegel, Menahem, 1987. "The effects of lump-sum subsidies on the structure of production and productivity in regulated industries," Journal of Public Economics, Elsevier, vol. 34(1), pages 105-119, October.
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