Public Versus Private Water Delivery: A Hedonic Cost Approach

Feigenbaum, Susan K.; Teeples, Ronald K.

doi:10.2307/1935940

Cited by 148 publications

(84 citation statements)

References 7 publications

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“…Feigenbaum and Teeples (1983), using a sample of government and privately-owned U.S. water suppliers suggest that, contrary to public choice or property rights theories, no evidence could be found of significant differences in the cost functions of public versus private utilities. Bhattacharyya et al (1994) and Bhattacharyya et al (1995a and1995b) modeled the cost structure of a sample of U.S. water utilities embodying the potential input allocative distortion attributable to the ownership nature.…”

Section: Previous Empirical Literaturementioning

confidence: 67%

Regulation and Efficiency Incentives: Evidence from the England and Wales Water and Sewerage Industry

Erbetta¹,

Cave²

2007

Review of Network Economics

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This paper evaluates the impact of the tightening in price cap by OFWAT and of other operational factors on the efficiency of water and sewerage companies in England and Wales using a mixture of data envelopment analysis and stochastic frontier analysis. Previous empirical results suggest that the regulatory system introduced at privatization was lax. The 1999 price review signaled a tightening in regulation which is shown to have led to a significant reduction in technical inefficiency. The new economic environment set by price-cap regulation acted to bring inputs closer to their cost-minimizing levels from both a technical and allocative perspective. IntroductionThe England and Wales water and sewerage industry was privatized in 1989 and thenceforth has been subject to a sequence of five-year price controls in the form of price caps. Price-cap regulation is set out to be a high-powered incentive scheme. However, previous empirical findings have shown that the cap introduced at privatization in 1989 had been lax (Saal and Parker, 2000), in the sense of allowing real price increases and the evidence that the first price review in 1994 produced efficiency gains is weak Parker, 2001 and. This may be explained by the double duty of the regulator to encourage a higher level of efficiency and provide the companies with the financial resources to support their investment programs. The 1999 price review signaled a change in the implementation of regulatory policy by imposing for the first time a real price reduction.

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Section: Previous Empirical Literaturementioning

confidence: 67%

Regulation and Efficiency Incentives: Evidence from the England and Wales Water and Sewerage Industry

Erbetta¹,

Cave²

2007

Review of Network Economics

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“…Several studies conducted in the US, Canada and the countries of Latin America since the 1970s did not discover any discernible difference between publicly and privately owned firms entrusted of service provision, either in terms of costs or efficiency [17][18][19]. Using data collected from the American Water Workers Association, a number of studies that implemented either parametric or non-parametric techniques failed to ascertain whether private operators are more efficient than public ones.…”

Section: Private Vs Public Ownership And/or Management Of Water Provmentioning

confidence: 99%

Are Public-Private Partnerships a Source of Greater Efficiency in Water Supply? Results of a Non-Parametric Performance Analysis Relating to the Italian Industry

Storto

2013

Water

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This article reports the outcome of a performance study of the water service provision industry in Italy. The study evaluates the efficiency of 21 "private or public-private" equity and 32 "public" equity water service operators and investigates controlling factors. In particular, the influence that the operator typology and service management nature -private vs. public -has on efficiency is assessed. The study employed a two-stage Data Envelopment Analysis methodology. In the first stage, the operational efficiency of water supply operators is calculated by implementing a conventional BCC DEA model, that uses both physical infrastructure and financial input and output variables to explore economies of scale. In the second stage, bootstrapped DEA and Tobit regression are performed to estimate the influence that a number of environmental factors have on water supplier efficiency. The results show that the integrated water provision industry in Italy is characterized by operational inefficiencies of service operators, and scale and agglomeration economies may have a not negligible effect on efficiency. In addition, the operator typology and its geographical location affect efficiency.

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“…One is to evaluate price schemes and to design optimal prices (Garcia-Valiñas, 2005;Garcia and Reynaud, 2004;Kim, 1995;Renzetti, 1992). Another is to analyse the effects of ownership and regulation on utility performance (Saal and Parker, 2000;Bhattacharyya et al, 1995;Feigenbaum and Teeples, 1983). Finally, the third purpose is to check for the presence of economies of scale and of scope in the water industry (Stone & Webster Consultants, 2004;Fraquelli et al, 2002;Garcia and Thomas, 2001;Fabbri and Fraquelli, 2000;Hayes, 1987;Kim, 1985).…”

mentioning

confidence: 99%

“…These include econometric techniques (see Garcia-Valiñas, 2005;Garcia and Reynaud, 2004;Timmins, 2002;Feigenbaum and Teeples, 1983;Renzetti, 1992;Bhattacharyya et al, 1995) and direct formulas (see Turvey, 1976;Ford and Warford, 1969). The dependent variable commonly used is production (operational) costs, because there is more uncertainty about the calculation of the remaining elements of costs, such as economic and environmental externalities and opportunity costs (Rogers et al, 2002), as pointed out by Garcia-Valiñas (2005:192).…”

mentioning

confidence: 99%

Water losses and hydrographical regions influence on the cost structure of the Portuguese water industry

2011

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There is a consensus that the emphasis on the management of water resources should be put on demand side policies. However, some questions remain to be solved on the supply side, which are frequently absent from empirical studies based on the estimation of cost functions. This paper aims to fill to some extent this gap in the literature by focusing the consequences of water losses reduction and the management of water resources based on their availability at an integrated river basin level.Major findings indicate that it would be better in terms of costs to maintain some level of water losses than to repair the leaks and suggest advantages from more concentration in the Portuguese water industry. In addition, the costs do not seem to be systematically influenced by the hydrographical regions to which water utilities belong, what might be due to the absence of appropriate cost accounting methods.JEL Classification: L11, L95, Q25

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Public Versus Private Water Delivery: A Hedonic Cost Approach

Cited by 148 publications

References 7 publications

Regulation and Efficiency Incentives: Evidence from the England and Wales Water and Sewerage Industry

Regulation and Efficiency Incentives: Evidence from the England and Wales Water and Sewerage Industry

Are Public-Private Partnerships a Source of Greater Efficiency in Water Supply? Results of a Non-Parametric Performance Analysis Relating to the Italian Industry

Water losses and hydrographical regions influence on the cost structure of the Portuguese water industry

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