IDEAS home Printed from https://ideas.repec.org/a/kap/jproda/v23y2005i3p383-409.html
   My bibliography  Save this article

The Impact of Regulation on Cost Efficiency: An Empirical Analysis of Wisconsin Water Utilities

Author

Listed:
  • Cécile Aubert
  • Arnaud Reynaud

Abstract

The impact of regulation of efforts to minimize costs has been widely discussed, but remains difficult to measure. The sophisticated regulation of water utilities in Wisconsin allows us to attempt such on assessment since different firms can be under different regulatory regimes (price cap or rate-of-return) in the same geographical area at the same time. To measure the impact of regulation on efficiency, we use a stochastic cost frontier approach defining the unobservable efficiency of a water utility as a function of exogeneous variables. Using a panel of 211 water utilities observed from 1998 to 2000, we show that their efficiency scores can be partly explained by the regulatory framework. Copyright Springer Science+Business Media, Inc. 2005

Suggested Citation

  • Cécile Aubert & Arnaud Reynaud, 2005. "The Impact of Regulation on Cost Efficiency: An Empirical Analysis of Wisconsin Water Utilities," Journal of Productivity Analysis, Springer, vol. 23(3), pages 383-409, July.
    • Handle: RePEc:kap:jproda:v:23:y:2005:i:3:p:383-409
    DOI: 10.1007/s11123-005-2216-8
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s11123-005-2216-8
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s11123-005-2216-8?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. Estache, Antonio & Rossi, Martin A., 2005. "Do regulation and ownership drive the efficiency of electricity distribution? Evidence from Latin America," Economics Letters, Elsevier, vol. 86(2), pages 253-257, February.
    2. repec:ccp:journl:v:23:y:2003:i:5:p:137-149 is not listed on IDEAS
    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. Martín Rossi, 2015. "Using Labor Productivity Change Estimates as an Input for X-Factors in Price-Cap Regulation," Working Papers 118, Universidad de San Andres, Departamento de Economia, revised Feb 2015.
    2. Schober, Dominik, 2013. "Static vs. dynamic impacts of unbundling: Electricity markets in South America," ZEW Discussion Papers 13-033, ZEW - Leibniz Centre for European Economic Research.
    3. Liam Wren-Lewis, 2015. "Do Infrastructure Reforms Reduce the Effect of Corruption? Theory and Evidence from Latin America and the Caribbean," The World Bank Economic Review, World Bank, vol. 29(2), pages 353-384.
    4. Adwoa Asantewaa & Tooraj Jamasb & Manuel Llorca, 2022. "Electricity Sector Reform Performance in Sub-Saharan Africa: A Parametric Distance Function Approach," Energies, MDPI, vol. 15(6), pages 1-29, March.
    5. Tooraj Jamasb & Rabindra Nepal & Govinda Timilsina & Michael Toman, 2014. "Energy Sector Reform, Economic Efficiency and Poverty Reduction," Discussion Papers Series 529, School of Economics, University of Queensland, Australia.
    6. Geginat, Carolin & Ramalho, Rita, 2018. "Electricity connections and firm performance in 183 countries," Energy Economics, Elsevier, vol. 76(C), pages 344-366.
    7. Estache, Antonio & Rossi, Martin A., 2008. "Regulatory agencies : impact on firm performance and social welfare," Policy Research Working Paper Series 4509, The World Bank.
    8. Jamasb,Tooraj & Nepal,Rabindra & Timilsina,Govinda R., 2015. "A quarter century effort yet to come of age : a survey of power sector reforms in developing countries," Policy Research Working Paper Series 7330, The World Bank.
    9. Stephane Straub, 2008. "Infrastructure and Growth in Developing Countries: Recent Advances and Research Challenges," Edinburgh School of Economics Discussion Paper Series 179, Edinburgh School of Economics, University of Edinburgh.
    10. Estache, Antonio & Goicoechea, Ana & Trujillo, Lourdes, 2009. "Utilities reforms and corruption in developing countries," Utilities Policy, Elsevier, vol. 17(2), pages 191-202, June.
    11. Shabbar Jaffry & Yaseen Ghulam & Joe Cox, 2006. "Impact of Regulatory Reforms on Labour Efficiency in the Indian and Pakistani Commercial Banks," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 45(4), pages 1085-1102.
    12. Tooraj Jamasb & Rabindra Nepal & Govinda R. Timilsina, 2017. "A Quarter Century Effort Yet to Come of Age: A Survey of Electricity Sector Reform in Developing Countries," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3).
    13. Stephane Straub, 2011. "Infrastructure and Development: A Critical Appraisal of the Macro-level Literature," Journal of Development Studies, Taylor & Francis Journals, vol. 47(5), pages 683-708.
    14. Antonio Estache & L. Wren-Lewis, 2008. "Towards a Theory of Regulation for Developing Countries: Following Laffont's Lead," Working Papers ECARES 2008_018, ULB -- Universite Libre de Bruxelles.
    15. Antonio Estache & Liam Wren-Lewis, 2009. "Toward a Theory of Regulation for Developing Countries: Following Jean-Jacques Laffont's Lead," Journal of Economic Literature, American Economic Association, vol. 47(3), pages 729-770, September.
    16. Erik Lundin, 2020. "Effects of Privatization on Price and Labor Efficiency: The Swedish Electricity Distribution Sector," The Energy Journal, , vol. 41(2), pages 247-274, March.
    17. Tim Coelli & Denis Lawrence (ed.), 2006. "Performance Measurement and Regulation of Network Utilities," Books, Edward Elgar Publishing, number 3801.
    18. Elisa Borghi & Chiara Del Bo & Massimo Florio, 2016. "Institutions and Firms' Productivity: Evidence from Electricity Distribution in the EU," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 78(2), pages 170-196, April.
    19. Zhang, Yin-Fang & Ji, Shengbao, 2018. "Does infrastructure have a transitory or longer-term impact? Evidence from China," Economic Modelling, Elsevier, vol. 73(C), pages 195-207.
    20. Antonio Estache, 2006. "PPI Partnerships vs. PPI Divorces in LDCs," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 29(1), pages 3-26, September.

    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:kap:jproda:v:23:y:2005:i:3:p:383-409. 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    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.