Public versus Private Water Delivery: Cost Comparisons

Teeples, Ronald K.; Feigenbaum, Susan K.; Glyer, David

doi:10.1177/109114218601400307

Cited by 11 publications

(3 citation statements)

References 12 publications

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“…Two stud ies found pub licly owned water util i ties in the United States to be more effi cient, whereas a third reached the oppo site con clu sion (Bruggink, 1982). Other research ers could find no sig nif i cant dif fer ence in effi ciency between pub lic and pri vate water util i ties in the United States (Teeples, Feigenbaum, & Glyer, 1986). A study conducted in Great Brit ain com pared the rel a tive effi ciency, prior to pri vat iza tion, of pub lic ver sus pri vate water util i ties.…”

Section: Ev I Dence From Pri Vate Util Itiesmentioning

confidence: 98%

Privatizing Municipal Water and Wastewater Systems

Werkman¹,

Westerling

2000

Public Works Management & Policy

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This article examines the argument that using design-build-operate (DBO) contracting instead of traditional approaches (such as contract operations) to expand the private sector role in the management of municipal water and wastewater systems will lead to more efficient investment and operational practices. Privatization research reviewed in this article suggests that capturing and maintaining the benefits of market competition on the cost of service under a DBO contract may be an elusive objective. For cities considering long-term DBO privatization, the research and case studies presented demonstrate the importance of investing in the necessary expertise to (a) plan and structure a procurement process that generates meaningful price competition, (b) develop contract terms that give the public owner input into and control over key design criteria for capital improvements, and (c) realistically assess the impact of changing circumstances on future costs to develop accurate long-term cost projections.

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Section: Ev I Dence From Pri Vate Util Itiesmentioning

confidence: 98%

Privatizing Municipal Water and Wastewater Systems

Werkman¹,

Westerling

2000

Public Works Management & Policy

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“…Hedonic cost approaches for water utilities were also used by Feigenbaum and Teeples (1983) and Teeples, Feigenbaum, and Glyer (1986); they examined the effect of ownership on cost structure. A hedonic model incorporating a translog cost function with factor prices and quality-adjusted production was specified.…”

Section: Introductionmentioning

confidence: 99%

A Hedonic Approach to Estimating Operation and Maintenance Costs for New York Municipal Water Systems

Schmit

Boisvert

1997

Agric. resour. econ. rev.

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A hedonic cost function is used to isolate the operation and maintenance costs for water treatments. For small systems, costs are substantial for some technologies, but not for others. When regional differences in input costs are accounted for, small systems located in rural areas may have a cost advantage over similar systems closer to urban centers; however, costs of water treatment to meet Safe Drinking Water Act amendments may still be substantial.The ability of small public water systems to com-tionwide serve populations under 3,300 people. ply with monitoring and treatment requirements Many believe that systems below this size are ununder the Safe Drinking Water Act (SDWA) con-able to take advantage of economies of size and/or tinues to be an open question for national, state, have insufficient resources to finance SDWA reand local policymakers and government officials. quirements at a reasonable cost to consumers Based on EPA's recent survey of the need for im-(Boisvert and Schmit 1996; EPA 1993b). Current provements in the public water system infrastruc-and future costs for both treatment and distribution ture (1997), the nation's 55,000 community water are substantial. Thus, policymakers need specific systems must invest about $140 billion (1995 dol-information about the cost implications of the lars) over the next twenty years to install, upgrade, regulatory requirements and potential dramatic inor replace infrastructure to insure the provision of creases in water rates for system users, particularly safe drinking water. Estimates of average costs per for small systems. household range from $970 for large systems to This research contributes to an understanding of $3,300 for small systems, those serving fewer than public water system treatment costs by accounting 3,300 people.for size, population densities, factor prices, and Just over half of this total investment is needed water treatment in estimating public water utility for treatment or distribution expenses related to the cost functions. The differential costs of alternative SDWA. About $12 billion is needed immediately water treatments (including aeration, ion exchange, to comply with current SDWA regulations. Total to comply with current SDWA regulations. Total and several filtration processes) are accounted for twenty-year costs for SDWA and SDWA-related twenty-year costs for SDWA and SDWA-related in a hedonic fashion. This model specification is needs, including proposed regulations of the En-

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“…Studies of the relative efficiency of public and private firms in the same economic activity have generally ignored potential inflationinduced distortions of accounting data on their comparisons. [1986], Feigenbaum and Teeples [1983], Teeples et al [1986], and Glyer and Teeples [1987] in the urban water case.…”

mentioning

confidence: 99%

Accounting‐Induced Distortion in Public Enterprise Pricing

Moncur¹,

Pollock²

1996

Water Resources Research

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Municipal water utilities commonly aim to set prices at average cost. Because of various omissions and owing to inflation, unadjusted accounting data understate the economic costs of fixed assets and thus generate inefficiently low prices and high consumption rates for the output of these enterprises. We investigate the nature and extent of undercosting and underpricing for a group of large urban water utilities in the United States. Economic costs appear to be significantly greater than the corresponding accounting measures for the cases studied.

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Public versus Private Water Delivery: Cost Comparisons

Cited by 11 publications

References 12 publications

Privatizing Municipal Water and Wastewater Systems

Privatizing Municipal Water and Wastewater Systems

A Hedonic Approach to Estimating Operation and Maintenance Costs for New York Municipal Water Systems

Accounting‐Induced Distortion in Public Enterprise Pricing

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