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Assessing the efficiency of Chilean water and sewerage companies accounting for uncertainty

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  • Molinos-Senante, María
  • Donoso, Guillermo
  • Sala-Garrido, Ramon

Abstract

Efficiency assessment of water and sewerage companies (WaSCs) has attracted considerable attention both for water company managers and water regulators. Within the methodological approaches that can be applied to estimate efficiency scores, data envelopment analysis (DEA) is the most widely applied technique. In spite of the positive features of DEA, it presents a major drawback which is its deterministic nature. In other words, conventional DEA models do not account for uncertainty in the data. To overcome this limitation, we assess, for the first time, the efficiency of a sample of Chilean WaSCs by using a DEA model with statistical tolerance in the data. Hence, 81 efficiency scores are estimated for each WaSC rather than a single score as with conventional DEA models. The results illustrate that outputs exhibit larger uncertainty than inputs. Moreover, WaSCs efficiency scores change significantly under the best-case and worst-case scenarios. The ranking of the WaSCs allows for the identification of which of them has the highest performance based on their efficiency scores. This information is essential to enhance efficiency and innovation in the water industry. Moreover, the introduction of uncertainty in the efficiency assessment allows for the prediction and ranking of future performance of WaSCs.

Suggested Citation

  • Molinos-Senante, María & Donoso, Guillermo & Sala-Garrido, Ramon, 2016. "Assessing the efficiency of Chilean water and sewerage companies accounting for uncertainty," Environmental Science & Policy, Elsevier, vol. 61(C), pages 116-123.
    • Handle: RePEc:eee:enscpo:v:61:y:2016:i:c:p:116-123
    DOI: 10.1016/j.envsci.2016.04.003
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    Citations

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    Cited by:

    1. Eiji Satoh, 2019. "Water Demand Fluctuations, Non-Transferable Water Rights, and Technical Inefficiency in Japan’s Water Sector," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 5(03), pages 1-27, July.
    2. José Antonio Palomero-González & Vicent Almenar-Llongo & Ramón Fuentes-Pascual, 2021. "Evaluating the Efficiency of Water Distribution Network Sectors Using the DEA-Weight Russell Directional Distance Model: The Case of the City of Valencia (Spain)," Sustainability, MDPI, vol. 13(19), pages 1-21, September.
    3. Molinos-Senante, María & Guzmán, Catalina, 2018. "Reducing CO2 emissions from drinking water treatment plants: A shadow price approach," Applied Energy, Elsevier, vol. 210(C), pages 623-631.
    4. de Souza Pereira, Mariana & Magalhães Filho, Fernando Jorge Corrêa & de Morais Lima, Priscila & Tabak, Benjamin Miranda & Constantino, Michel, 2022. "Sanitation and water services: Who is the most efficient provider public or private? Evidences for Brazil," Socio-Economic Planning Sciences, Elsevier, vol. 79(C).
    5. Weixin Yang & Lingguang Li, 2017. "Efficiency Evaluation and Policy Analysis of Industrial Wastewater Control in China," Energies, MDPI, vol. 10(8), pages 1-18, August.

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