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Technical efficiency in Chile's water and sanitation providers

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  • Ferro, Gustavo
  • Mercadier, Augusto C.

Abstract

Chile achieved universal levels of coverage in water, sewerage and wastewater treatment in urban areas. The providers show complete cost recovery, universal metering and diminishing consumption. But investments in Non-Revenue Water control have been deemed insufficient. We explore the sector's comparative technical efficiency, in recent years, and address new challenges related to Non-Revenue Water reduction. We find that a 10 percent reduction in Non-Revenue Water implies a 2.6 percent increase in the input vector. Regulators can induce providers to invest more by recognizing the increased costs, and influence efficiency gains sharing with clients, including automatic coefficients in the rate formula.

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  • Ferro, Gustavo & Mercadier, Augusto C., 2016. "Technical efficiency in Chile's water and sanitation providers," Utilities Policy, Elsevier, vol. 43(PA), pages 97-106.
    • Handle: RePEc:eee:juipol:v:43:y:2016:i:pa:p:97-106
    DOI: 10.1016/j.jup.2016.04.016
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    7. Adriana Cobas & Alexandros Maziotis & Andrés Villegas, 2023. "Measurement of Efficiency and its Drivers in the Chilean Banking Industry," Working Papers Central Bank of Chile 987, Central Bank of Chile.
    8. Maria Molinos-Senante & Alexandros Maziotis, 2021. "Productivity growth, economies of scale and scope in the water and sewerage industry: The Chilean case," PLOS ONE, Public Library of Science, vol. 16(5), pages 1-16, May.
    9. Amaral, António L. & Martins, Rita & Dias, Luís C., 2023. "Operational drivers of water reuse efficiency in Portuguese wastewater service providers," Utilities Policy, Elsevier, vol. 83(C).
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