IDEAS home Printed from https://ideas.repec.org/a/eee/juipol/v24y2013icp70-77.html
   My bibliography  Save this article

Disentangling the cost efficiency of jointly provided water and wastewater services

Author

Listed:
  • Cruz, Nuno Ferreira da
  • Carvalho, Pedro
  • Marques, Rui Cunha

Abstract

Providing operators with objective incentives for cost efficiency and continuous improvement in the provision of public services are major concerns for regulators. Measuring efficiency empirically is complex and this complexity is accentuated when the same operator is responsible for delivering more than one service (e.g. in order to explore potential economies of scope). Based on a sample of operators that provide water and wastewater services, this paper uses a shared input data envelopment analysis model to measure separately the efficiency of each service. The results show that a single measure may not provide enough information for monitoring multi-utilities. Together with other indicators, the proposed model can assist decision-makers in prioritizing efforts to improve overall efficiency.

Suggested Citation

  • Cruz, Nuno Ferreira da & Carvalho, Pedro & Marques, Rui Cunha, 2013. "Disentangling the cost efficiency of jointly provided water and wastewater services," Utilities Policy, Elsevier, vol. 24(C), pages 70-77.
    • Handle: RePEc:eee:juipol:v:24:y:2013:i:c:p:70-77
    DOI: 10.1016/j.jup.2012.09.002
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0957178712000525
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jup.2012.09.002?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Carvalho, Pedro & Marques, Rui Cunha & Berg, Sanford, 2012. "A meta-regression analysis of benchmarking studies on water utilities market structure," Utilities Policy, Elsevier, vol. 21(C), pages 40-49.
    2. da Cruz, Nuno F. & Marques, Rui Cunha, 2012. "Mixed companies and local governance: no man can serve two masters," LSE Research Online Documents on Economics 59778, London School of Economics and Political Science, LSE Library.
    3. Fried, Harold O. & Lovell, C. A. Knox & Schmidt, Shelton S. (ed.), 2008. "The Measurement of Productive Efficiency and Productivity Growth," OUP Catalogue, Oxford University Press, number 9780195183528.
    4. Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November.
    5. Wade Cook & Moez Hababou & Hans Tuenter, 2000. "Multicomponent Efficiency Measurement and Shared Inputs in Data Envelopment Analysis: An Application to Sales and Service Performance in Bank Branches," Journal of Productivity Analysis, Springer, vol. 14(3), pages 209-224, November.
    6. Cook, Wade D. & Green, Rodney H., 2004. "Multicomponent efficiency measurement and core business identification in multiplant firms: A DEA model," European Journal of Operational Research, Elsevier, vol. 157(3), pages 540-551, September.
    7. Romano, Giulia & Guerrini, Andrea, 2011. "Measuring and comparing the efficiency of water utility companies: A data envelopment analysis approach," Utilities Policy, Elsevier, vol. 19(3), pages 202-209.
    8. Rogge, Nicky & de Jaeger, Simon, 2012. "Evaluating the efficiency of municipalities in collecting and processing municipal solid waste: A shared input DEA-model," Working Papers 2012/22, Hogeschool-Universiteit Brussel, Faculteit Economie en Management.
    9. Berg, Sanford V., 2000. "Sustainable regulatory systems: laws, resources, and values," Utilities Policy, Elsevier, vol. 9(4), pages 159-170, December.
    10. Chen, Yao & Du, Juan & David Sherman, H. & Zhu, Joe, 2010. "DEA model with shared resources and efficiency decomposition," European Journal of Operational Research, Elsevier, vol. 207(1), pages 339-349, November.
    11. R. Cunha Marques & Kristof De Witte, 2010. "Towards a benchmarking paradigm in European water utilities," Public Money & Management, Taylor & Francis Journals, vol. 30(1), pages 42-48, January.
    12. Abbott, Malcolm & Cohen, Bruce, 2009. "Productivity and efficiency in the water industry," Utilities Policy, Elsevier, vol. 17(3-4), pages 233-244, September.
    13. Andrei Shleifer, 1985. "A Theory of Yardstick Competition," RAND Journal of Economics, The RAND Corporation, vol. 16(3), pages 319-327, Autumn.
    14. Torres, Marcelo & Morrison Paul, Catherine J., 2006. "Driving forces for consolidation or fragmentation of the US water utility industry: A cost function approach with endogenous output," Journal of Urban Economics, Elsevier, vol. 59(1), pages 104-120, January.
    15. Marques, Rui Cunha, 2006. "A yardstick competition model for Portuguese water and sewerage services regulation," Utilities Policy, Elsevier, vol. 14(3), pages 175-184, September.
    16. R. D. Banker & A. Charnes & W. W. Cooper, 1984. "Some Models for Estimating Technical and Scale Inefficiencies in Data Envelopment Analysis," Management Science, INFORMS, vol. 30(9), pages 1078-1092, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kao, Chiang, 2014. "Network data envelopment analysis: A review," European Journal of Operational Research, Elsevier, vol. 239(1), pages 1-16.
    2. Guerrini, Andrea & Romano, Giulia & Mancuso, Fabrizio & Carosi, Laura, 2016. "Identifying the performance drivers of wastewater treatment plants through conditional order-m efficiency analysis," Utilities Policy, Elsevier, vol. 42(C), pages 20-31.
    3. Xiyang Lei & Yongjun Li & Alec Morton, 2022. "Dominance and ranking interval in DEA parallel production systems," OR Spectrum: Quantitative Approaches in Management, Springer;Gesellschaft für Operations Research e.V., vol. 44(2), pages 649-675, June.
    4. Mardani, Abbas & Zavadskas, Edmundas Kazimieras & Streimikiene, Dalia & Jusoh, Ahmad & Khoshnoudi, Masoumeh, 2017. "A comprehensive review of data envelopment analysis (DEA) approach in energy efficiency," Renewable and Sustainable Energy Reviews, Elsevier, vol. 70(C), pages 1298-1322.
    5. Carvalho, Anne Emília Costa & Sampaio, Luciano Menezes Bezerra, 2015. "Paths to universalize water and sewage services in Brazil: The role of regulatory authorities in promoting efficient service," Utilities Policy, Elsevier, vol. 34(C), pages 1-10.
    6. Shi, Zhen & She, Zhiyu & Chiu, Yung-ho & Qin, Shijiong & Zhang, Lina, 2021. "Assessment and improvement analysis of economic production, water pollution, and sewage treatment efficiency in China," Socio-Economic Planning Sciences, Elsevier, vol. 74(C).
    7. 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.
    8. Blaeschke, Frédéric & Haug, Peter, 2014. "Does Intermunicipal Cooperation Increase Efficiency? Evidence from the Hessian Wastewater Sector," IWH Discussion Papers 11/2014, Halle Institute for Economic Research (IWH).
    9. Corrado Lo Storto, 2018. "Efficiency, Conflicting Goals and Trade-Offs: A Nonparametric Analysis of the Water and Wastewater Service Industry in Italy," Sustainability, MDPI, vol. 10(4), pages 1-22, March.
    10. Kao, Chiang, 2016. "Efficiency decomposition and aggregation in network data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 255(3), pages 778-786.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Francisco González-Gómez & Miguel García‐Rubio & Francisco Alcalá-Olid & M. Ortega-Díaz, 2013. "Outsourcing and Efficiency in the Management of Rural Water Services," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 27(3), pages 731-747, February.
    2. Kao, Chiang, 2014. "Network data envelopment analysis: A review," European Journal of Operational Research, Elsevier, vol. 239(1), pages 1-16.
    3. Andrea Guerrini & Giulia Romano & Bettina Campedelli, 2013. "Economies of Scale, Scope, and Density in the Italian Water Sector: A Two-Stage Data Envelopment Analysis Approach," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 27(13), pages 4559-4578, October.
    4. Liu, Junqing & Fukushige, Mototsugu, 2020. "Efficiency and pricing of water supply and sewerage services in Japan," Utilities Policy, Elsevier, vol. 62(C).
    5. Vilarinho, Hermilio & D’Inverno, Giovanna & Nóvoa, Henriqueta & Camanho, Ana S., 2023. "The measurement of asset management performance of water companies," Socio-Economic Planning Sciences, Elsevier, vol. 87(PA).
    6. Cossani, Gianfranco & Codoceo, Loreto & Cáceres, Hernán & Tabilo, Jorge, 2022. "Technical efficiency in Chile’s higher education system: A comparison of rankings and accreditation," Evaluation and Program Planning, Elsevier, vol. 92(C).
    7. Vilarinho, Hermilio & D’Inverno, Giovanna & Nóvoa, Henriqueta & Camanho, Ana S., 2023. "Performance analytics for regulation in retail water utilities: Guiding asset management by identifying peers and targets," Utilities Policy, Elsevier, vol. 82(C).
    8. Lorenzo Castelli & Raffaele Pesenti & Walter Ukovich, 2010. "A classification of DEA models when the internal structure of the Decision Making Units is considered," Annals of Operations Research, Springer, vol. 173(1), pages 207-235, January.
    9. Carvalho, Pedro & Marques, Rui Cunha, 2014. "Computing economies of vertical integration, economies of scope and economies of scale using partial frontier nonparametric methods," European Journal of Operational Research, Elsevier, vol. 234(1), pages 292-307.
    10. Mallikarjun, Sreekanth & Lewis, Herbert F. & Sexton, Thomas R., 2014. "Operational performance of U.S. public rail transit and implications for public policy," Socio-Economic Planning Sciences, Elsevier, vol. 48(1), pages 74-88.
    11. Yande Gong & Joe Zhu & Ya Chen & Wade D. Cook, 2018. "DEA as a tool for auditing: application to Chinese manufacturing industry with parallel network structures," Annals of Operations Research, Springer, vol. 263(1), pages 247-269, April.
    12. Carvalho, Anne Emília Costa & Sampaio, Luciano Menezes Bezerra, 2015. "Paths to universalize water and sewage services in Brazil: The role of regulatory authorities in promoting efficient service," Utilities Policy, Elsevier, vol. 34(C), pages 1-10.
    13. Kao, Chiang, 2016. "Efficiency decomposition and aggregation in network data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 255(3), pages 778-786.
    14. Ding, Jingjing & Dong, Wei & Liang, Liang & Zhu, Joe, 2017. "Goal congruence analysis in multi-Division Organizations with shared resources based on data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 263(3), pages 961-973.
    15. Romano, Giulia & Guerrini, Andrea, 2011. "Measuring and comparing the efficiency of water utility companies: A data envelopment analysis approach," Utilities Policy, Elsevier, vol. 19(3), pages 202-209.
    16. Laurens Cherchye & Bram De Rock & Bart Dierynck & Filip Roodhooft & Jeroen Sabbe, 2013. "Opening the “Black Box” of Efficiency Measurement: Input Allocation in Multioutput Settings," Operations Research, INFORMS, vol. 61(5), pages 1148-1165, October.
    17. An, Qingxian & Tao, Xiangyang & Chen, Xiaohong, 2023. "Nested frontier-based best practice regulation under asymmetric information in a principal–agent framework," European Journal of Operational Research, Elsevier, vol. 306(1), pages 269-285.
    18. Guerrini, Andrea & Romano, Giulia, 2013. "The process of tariff setting in an unstable legal framework: An Italian case study," Utilities Policy, Elsevier, vol. 24(C), pages 78-85.
    19. Avilés-Sacoto, Sonia Valeria & Cook, Wade D. & Güemes-Castorena, David & Zhu, Joe, 2020. "Modelling Efficiency in Regional Innovation Systems: A Two-Stage Data Envelopment Analysis Problem with Shared Outputs within Groups of Decision-Making Units," European Journal of Operational Research, Elsevier, vol. 287(2), pages 572-582.
    20. Majid Azadi & Balal Karimi & William Ho & Reza Farzipoor Saen, 2022. "Assessing green performance of power plants by multiple hybrid returns to scale technologies," OR Spectrum: Quantitative Approaches in Management, Springer;Gesellschaft für Operations Research e.V., vol. 44(4), pages 1177-1211, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:juipol:v:24:y:2013:i:c:p:70-77. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.sciencedirect.com/journal/utilities-policy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.