IDEAS home Printed from https://ideas.repec.org/a/eee/juipol/v79y2022ics0957178722000935.html
   My bibliography  Save this article

Open Water: Impacts of Retail Competition on Service Performance and Water-Use Efficiency in England

Author

Listed:
  • Mukherjee, Maitreyee
  • Jensen, Olivia

Abstract

This paper examines the retail water service market introduced in England in 2017, which allows non-domestic consumers to choose their water retailer. Market competition was intended to motivate service improvement and enhance water-use efficiency. Interview and survey data on the responses of incumbent water companies and the impact on consumers reveal varied strategic responses but no significant change in service quality or bills. High transaction costs linked to market complexity, incompetent data management, asymmetric information, and regulatory restrictions account for the limited impact of market opening. Finally, contrary to expectation, the retail market does not appear to affect water-use efficiency uptake significantly.

Suggested Citation

  • Mukherjee, Maitreyee & Jensen, Olivia, 2022. "Open Water: Impacts of Retail Competition on Service Performance and Water-Use Efficiency in England," Utilities Policy, Elsevier, vol. 79(C).
  • Handle: RePEc:eee:juipol:v:79:y:2022:i:c:s0957178722000935
    DOI: 10.1016/j.jup.2022.101429
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0957178722000935
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.jup.2022.101429?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. Cave, Martin & Wright, Janet, 2010. "A strategy for introducing competition in the water sector," Utilities Policy, Elsevier, vol. 18(3), pages 116-119, September.
    2. Bel, Germà & Warner, Mildred, 2008. "Does privatization of solid waste and water services reduce costs? A review of empirical studies," Resources, Conservation & Recycling, Elsevier, vol. 52(12), pages 1337-1348.
    3. Esplin, Ryan & Davis, Ben & Rai, Alan & Nelson, Tim, 2020. "The impacts of price regulation on price dispersion in Australia's retail electricity markets," Energy Policy, Elsevier, vol. 147(C).
    4. Sawkins, John W., 2012. "The introduction of competition into the Scottish Water industry," Utilities Policy, Elsevier, vol. 20(1), pages 22-30.
    5. Evens Salies and Catherine Waddams Price, 2004. "Charges, Costs and Market Power: the Deregulated UK Electricity Retail Market," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 19-36.
    6. Oseni, Musiliu O. & Pollitt, Michael G., 2017. "The prospects for smart energy prices: Observations from 50 years of residential pricing for fixed line telecoms and electricity," Renewable and Sustainable Energy Reviews, Elsevier, vol. 70(C), pages 150-160.
    7. Littlechild, Stephen, 2018. "Competition, regulation and price controls in the GB retail energy market," Utilities Policy, Elsevier, vol. 52(C), pages 59-69.
    8. Byatt, Ian, 2013. "The regulation of water services in the UK," Utilities Policy, Elsevier, vol. 24(C), pages 3-10.
    9. Stephen Littlechild, 2016. "Contrasting Developments in UK Energy Regulation: Retail Policy and Consumer Engagement," Economic Affairs, Wiley Blackwell, vol. 36(2), pages 118-132, June.
    10. Xuejuan Su, 2015. "Have customers benefited from electricity retail competition?," Journal of Regulatory Economics, Springer, vol. 47(2), pages 146-182, April.
    11. Dan Andrews & Federico Cingano, 2014. "Public policy and resource allocation: evidence from firms in Oecd countries [‘Joseph Schumpeter Lecture. Appropriate growth policy: a unifying framework]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 29(78), pages 253-296.
    12. Defeuilley, Christophe, 2009. "Retail competition in electricity markets," Energy Policy, Elsevier, vol. 37(2), pages 377-386, February.
    13. Bel Germà & Fageda Xavier & E. Mildred, 2014. "Is private production of public services cheaper than public production? A meta-regression analysis of solid waste and water services," Public administration issues, Higher School of Economics, issue 3, pages 103-140.
    14. Stephen Littlechild, 2014. "Promoting or restricting competition?: Regulation of the UK retail residential energy market since 2008," Cambridge Working Papers in Economics 1441, Faculty of Economics, University of Cambridge.
    15. López González, Diana María & Garcia Rendon, John, 2022. "Opportunities and challenges of mainstreaming distributed energy resources towards the transition to more efficient and resilient energy markets," Renewable and Sustainable Energy Reviews, Elsevier, vol. 157(C).
    16. repec:oup:ecpoli:v:29:y:2014:i:78:p:253-296 is not listed on IDEAS
    17. repec:hal:spmain:info:hdl:2441/7189 is not listed on IDEAS
    18. A. Sutherland, 2007. "Efficiency Incentives for Public Sector Monopolies - The Case of Scottish Water," Competition and Regulation in Network Industries, Intersentia, vol. 8(4), pages 453-471, December.
    19. repec:hal:wpspec:info:hdl:2441/7189 is not listed on IDEAS
    20. David Saal & David Parker & Tom Weyman-Jones, 2007. "Determining the contribution of technical change, efficiency change and scale change to productivity growth in the privatized English and Welsh water and sewerage industry: 1985–2000," Journal of Productivity Analysis, Springer, vol. 28(1), pages 127-139, October.
    21. Hartley, Peter R. & Medlock, Kenneth B. & Jankovska, Olivera, 2019. "Electricity reform and retail pricing in Texas," Energy Economics, Elsevier, vol. 80(C), pages 1-11.
    22. Erdogan, Murside Rabia & Camgoz, Selin Metin & Karan, Mehmet Baha & Berument, M. Hakan, 2022. "The switching behavior of large-scale electricity consumers in The Turkish electricity retail market," Energy Policy, Elsevier, vol. 160(C).
    23. Chris M. Wilson & Catherine Waddams Price, 2010. "Do consumers switch to the best supplier?," Oxford Economic Papers, Oxford University Press, vol. 62(4), pages 647-668, October.
    24. Isabel M. García‐Sánchez, 2006. "Efficiency Measurement in Spanish Local Government: The Case of Municipal Water Services," Review of Policy Research, Policy Studies Organization, vol. 23(2), pages 355-372, March.
    25. Anwandter, Lars & Ozuna, Teofilo Jr., 2002. "Can public sector reforms improve the efficiency of public water utilities?," Environment and Development Economics, Cambridge University Press, vol. 7(4), pages 687-700, October.
    26. David S Saal & David Parker, 2000. "The impact of privatization and regulation on the water and sewerage industry in England and Wales: a translog cost function model," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 21(6), pages 253-268.
    27. Mulder, Machiel & Willems, Bert, 2019. "The Dutch retail electricity market," Energy Policy, Elsevier, vol. 127(C), pages 228-239.
    28. Molinos-Senante, María & Maziotis, Alexandros & Sala-Garrido, Ramón, 2020. "Changes in the total costs of the English and Welsh water and sewerage industry: The decomposed effect of price and quantity inputs on efficiency," Utilities Policy, Elsevier, vol. 66(C).
    29. Dieter Helm, 2020. "Thirty years after water privatization—is the English model the envy of the world?," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 36(1), pages 69-85.
    30. Morris, Jonathan & McGuinness, Martina, 2019. "Liberalisation of the English water industry: What implications for consumer engagement, environmental protection, and water security?," Utilities Policy, Elsevier, vol. 60(C), pages 1-1.
    31. Sarah Hendry, 2016. "Scottish Water: a public-sector success story," Water International, Taylor & Francis Journals, vol. 41(6), pages 900-915, September.
    32. Stephen Littlechild, 2019. "Promoting competition and protecting customers? Regulation of the GB retail energy market 2008–2016," Journal of Regulatory Economics, Springer, vol. 55(2), pages 107-139, April.
    Full references (including those not matched with items on IDEAS)

    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. Simone Di Leo & Marta Chicca & Cinzia Daraio & Andrea Guerrini & Stefano Scarcella, 2022. "A Framework for the Analysis of the Sustainability of the Energy Retail Market," Sustainability, MDPI, vol. 14(12), pages 1-28, June.
    2. Haar, Lawrence, 2021. "The competitive disadvantages facing British assetless electricity retailers," Energy Policy, Elsevier, vol. 155(C).
    3. Esplin, Ryan & Best, Rohan & Scranton, Jessica & Chai, Andreas, 2022. "Who pays the loyalty tax? The relationship between socioeconomic status and switching in Australia's retail electricity markets," Energy Policy, Elsevier, vol. 164(C).
    4. Abbott, Malcolm & Cohen, Bruce, 2009. "Productivity and efficiency in the water industry," Utilities Policy, Elsevier, vol. 17(3-4), pages 233-244, September.
    5. Muyi Yang & Yuanying Chi & Kristy Mamaril & Adam Berry & Xunpeng Shi & Liming Zhu, 2020. "Communication-Based Approach for Promoting Energy Consumer Switching: Some Evidence from Ofgem’s Database Trials in the United Kingdom," Energies, MDPI, vol. 13(19), pages 1-16, October.
    6. Mande Buafua, Patrick, 2015. "Efficiency of urban water supply in Sub-Saharan Africa: Do organization and regulation matter?," Utilities Policy, Elsevier, vol. 37(C), pages 13-22.
    7. 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.
    8. Esplin, Ryan & Davis, Ben & Rai, Alan & Nelson, Tim, 2020. "The impacts of price regulation on price dispersion in Australia's retail electricity markets," Energy Policy, Elsevier, vol. 147(C).
    9. Simeone, Christina E. & Lange, Ian & Gilbert, Ben, 2023. "Pass-through in residential retail electricity competition: Evidence from Pennsylvania," Utilities Policy, Elsevier, vol. 80(C).
    10. Walter, Matthias & Cullmann, Astrid & von Hirschhausen, Christian & Wand, Robert & Zschille, Michael, 2009. "Quo vadis efficiency analysis of water distribution? A comparative literature review," Utilities Policy, Elsevier, vol. 17(3-4), pages 225-232, September.
    11. Jinjin Zhao, 2020. "Productivity change in the privatized water sector in China (1999–2006)," Journal of Productivity Analysis, Springer, vol. 53(2), pages 227-241, April.
    12. Daglish, Toby, 2015. "Consumer Governance in Electricity Markets," Working Paper Series 4183, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    13. Miguel A. García-Rubio & Francisco González-Gómez & Jorge Guardiola, 2009. "Performance and ownership in the governance of urban water," FEG Working Paper Series 09/03, Faculty of Economics and Business (University of Granada).
    14. Andrés J. Picazo-Tadeo & Francisco González-Gómez & Francisco J. Sáez-Fernández, 2006. "Accounting for operating environments in measuring water utilities’ managerial efficiency," The Service Industries Journal, Taylor & Francis Journals, vol. 29(6), pages 761-773, July.
    15. Ligorio, Lorenzo & Caputo, Fabio & Venturelli, Andrea, 2022. "Sustainability disclosure and reporting by municipally owned water utilities," Utilities Policy, Elsevier, vol. 77(C).
    16. Brown, D.P. & Tsai, C.H. & Woo, C.K. & Zarnikau, J. & Zhu, S., 2020. "Residential electricity pricing in Texas's competitive retail market," Energy Economics, Elsevier, vol. 92(C).
    17. Xiaoping He & David Reiner, 2018. "Consumer Engagement in Energy Markets: The Role of Information and Knowledge," Working Papers EPRG 1835, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    18. 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.
    19. Mbuvi, Dorcas & Tarsim, Achraf, 2011. "Managerial ownership and urban water utilities efficiency in Uganda," MERIT Working Papers 2011-036, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    20. Picazo-Tadeo, Andres J. & Saez-Fernandez, Francisco J. & Gonzalez-Gomez, Francisco, 2008. "Does service quality matter in measuring the performance of water utilities," Utilities Policy, Elsevier, vol. 16(1), pages 30-38, March.

    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:79:y:2022:i:c:s0957178722000935. 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.