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Identifying scale economies for different types of water supply organizations in Japan

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  • Takuya Urakami

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Abstract

Although water supply systems include activities such as water intake; water purification; and water distribution, many water supply organizations are not always equipped with all three activities. In fact, Japan has two types of water companies: one that operates water intake and water purification (type 1); and the other which mainly operates water distribution (type 2). Many previous studies have attempted to identify scale economies for water supply organizations, but have failed to take into account which water supply systems operate. In this analysis we categorize Japanese water supply organizations into three types: type 1 - which operates water intake and water purification; type 2a - which not only operates water distribution, but also operates water intake and water purification; and type 2b - which operates water distribution, but purchases water from type 1 companies. After that, we estimate scale economies for each type of water supply organization using translog cost function. Furthermore, we take into account their water sources, especially type 1 and type 2a, because we consider that differences of water sources might affect the cost structure of water supply systems.

Suggested Citation

  • Takuya Urakami, 2005. "Identifying scale economies for different types of water supply organizations in Japan," ERSA conference papers ersa05p370, European Regional Science Association.
  • Handle: RePEc:wiw:wiwrsa:ersa05p370
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    File URL: http://www-sre.wu.ac.at/ersa/ersaconfs/ersa05/papers/370.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. Youn Kim, H. & Clark, Robert M., 1988. "Economies of scale and scope in water supply," Regional Science and Urban Economics, Elsevier, vol. 18(4), pages 479-502, November.
    3. Serge Garcia & Alban Thomas, 2001. "The Structure of Municipal Water Supply Costs: Application to a Panel of French Local Communities," Journal of Productivity Analysis, Springer, vol. 16(1), pages 5-29, July.
    4. 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.
    5. Arunava Bhattacharyya & Elliott Parker & Kambiz Raffiee, 1994. "An Examination of the Effect of Ownership on the Relative Efficiency of Public and Private Water Utilities," Land Economics, University of Wisconsin Press, vol. 70(2), pages 197-209.
    6. Kim, H Youn, 1987. "Economies of Scale in Multi-product Firms: An Empirical Analysis," Economica, London School of Economics and Political Science, vol. 54(214), pages 185-206, May.
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    Cited by:

    1. Saal David S. & Arocena Pablo & Maziotis Alexandros & Triebs Thomas, 2013. "Scale and Scope Economies and the Efficient Vertical and Horizontal Configuration of the Water Industry: A Survey of the Literature," Review of Network Economics, De Gruyter, vol. 12(1), pages 93-129, March.
    2. Zschille, Michael, 2012. "Consolidating the Water Industry: An Analysis of the Potential Gains from Horizontal Integration in a Conditional Efficiency Framework," CEPR Discussion Papers 8737, C.E.P.R. Discussion Papers.
    3. Michael Zschille, 2015. "Consolidating the water industry: an analysis of the potential gains from horizontal integration in a conditional efficiency framework," Journal of Productivity Analysis, Springer, vol. 44(1), pages 97-114, August.
    4. Michael Zschille, 2012. "Consolidating the Water Industry: An Analysis of the Potential Gains from Horizontal Integration in a Conditional Efficiency Framework," Discussion Papers of DIW Berlin 1187, DIW Berlin, German Institute for Economic Research.

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