Productivity change and its drivers for the Chilean water companies: A comparison of full private and concessionary companies

Abstract

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Productivity growth, economies of scale and scope in the water and sewerage industry: The Chilean case

“…However, it has hardly been applied to analyze productivity change of regulated sectors [ 29 , 30 ]. Moreover, while several studies have used a translog cost specification to estimate productivity change in water industry [ 18 , 31 ], to the best of our knowledge, the quadratic cost function to estimate the productivity change on the water sector has been hardly researched. Furthermore, as Triebs et al [ 26 ], Molinos-Senante and Maziotis [ 12 , 32 ] noted that there are several advantages for choosing a quadratic cost function over other functional forms such as a translog, composite or generalized composite which have also been used in other studies [ 9 , 10 , 33 , 34 ].…”

“…Like England and Wales, the Chilean water industry is fully privatized and its privatization took place during the years 1998–2004 [ 17 ]. (Two forms of companies were formed namely: i) full private water companies (FPWCs) where the full ownership and operation of infrastructure is undertaken by private consortiums for an infinite time period, and ii) concessionary water companies (CWCs) where the water services are provided by private consortiums for a limited time period (e.g., 30 years) through a concessionary contract [ 18 ]. A small proportion of customers is provided by a public water company as well [ 19 ].…”

“…Studies by Molinos-Senante and Sala-Garrido [ 17 ] and Sala-Garrido et al [ 19 , 24 ] used non-parametric techniques to study the productivity change of FPWCs and CWCs, i.e., the public water company was not integrated in the assessment. Studies by Molinos-Senante et al [ 18 , 25 ] used parametric techniques to study the performance of the private Chilean water industry. The main disadvantage of non-parametric techniques over parametric techniques lies in their inability to separate noise from inefficiency.…”

“…The main disadvantage of non-parametric techniques over parametric techniques lies in their inability to separate noise from inefficiency. However, Molinos-Senante et al [ 18 , 25 ] did not study the concept of economies of scale and scope between the provision of water and wastewater services. Our study aims to fills this gap in literature.…”

Eco-Efficiency of the English and Welsh Water Companies: A Cross Performance Assessment

“…The second was the number of treatment works when water is taken from surface water resources [ 62 ]. Finally, population density was defined as the ratio of population to the length of water mains [ 65 , 66 ]. Table 1 depicts the descriptive statistics of the variables used in the study.…”