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Competition in the Water Industry

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  • Cowan, Simon

Abstract

The paper discusses competition in the water industry in the UK, with the focus on product-market competition. Water has traditionally been seen as an industry characterized by regional or local natural monopoly, with franchising and contracting out, yardstick competition, and capital market competition being feasible, but not direct competition. Policy proposals for (i) inset appointments, (ii) common carriage, and (iii) cross-border competition are assessed. The effect of potential competition from inset appointments has been the introduction of quantity discounts for large users. In practice, the threat of competition is likely to make tariffs more cost-reflective, and there will probably be little effect on average tariff levels. Copyright 1997 by Oxford University Press.

Suggested Citation

  • Cowan, Simon, 1997. "Competition in the Water Industry," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 13(1), pages 83-92, Spring.
    • Handle: RePEc:oup:oxford:v:13:y:1997:i:1:p:83-92
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    Cited by:

    1. Reto Foellmi & Urs Meister, 2012. "Enhancing the Efficiency of Water Supply—Product Market Competition Versus Trade," Journal of Industry, Competition and Trade, Springer, vol. 12(3), pages 299-324, September.
    2. Faure-Grimaud, A. & Reiche, S., 2006. "Dynamic yardstick mechanisms," Games and Economic Behavior, Elsevier, vol. 54(2), pages 316-335, February.
    3. Faure-Grimaud, Antoine & Reiche, Sönje Kerrin, 2003. "Dynamic Yardstick Regulation," CEPR Discussion Papers 4035, C.E.P.R. Discussion Papers.
    4. Bottasso, Anna & Conti, Maurizio, 2003. "Cost Inefficiency in the English and Welsh Water Industry: An Heteroskedastic Stochastic Cost Frontier Approach," Economics Discussion Papers 8872, University of Essex, Department of Economics.
    5. Antoine Faure-Grimaud & Soenje Reiche, 2003. "Dynamic Yardstick Regulation," STICERD - Theoretical Economics Paper Series 459, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
    6. Eshien Chong & Freddy Huet, 2006. "Enchères, concurrence par comparaison et collusion," Revue économique, Presses de Sciences-Po, vol. 57(3), pages 583-592.
    7. Alberto Asquer, 2009. "On the many Ways Europeanization Matters: The Implementation of the Water Reform in Italy (1994-2006)," CESifo Working Paper Series 2869, CESifo.
    8. Reto Foellmi & Urs Meister, 2005. "Product-Market Competition in the Water Industry: Voluntary Non-discriminatory Pricing," Journal of Industry, Competition and Trade, Springer, vol. 5(2), pages 115-135, June.
    9. Nicolò Avogadro & Sebastian Birolini & Mattia Cattaneo & Paolo Malighetti & Chiara Morlotti & Renato Redondi, 2020. "Yardstick Regulation in a Competitive Context? The Case of the Italian Airports," Competition and Regulation in Network Industries, , vol. 21(3), pages 244-274, September.
    10. Tangeras, Thomas P., 2002. "Collusion-proof yardstick competition," Journal of Public Economics, Elsevier, vol. 83(2), pages 231-254, February.
    11. Jonas Teusch, 2019. "When Efficient Firms Flock Together: Merger Incentives Under Yardstick Competition," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 55(2), pages 237-255, September.
    12. Faure-Grimaud, Antoine & Reiche, Sonje, 2003. "Dynamic yardstick regulation," LSE Research Online Documents on Economics 19319, London School of Economics and Political Science, LSE Library.
    13. Renée Kidson & Brent Haddad & Hui Zheng & Steven Kasower & Robert Raucher, 2013. "Optimising Reliability: Portfolio Modeling of Contract Types for Retail Water Providers," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 27(9), pages 3209-3225, July.
    14. Fainboim Yaker, Israel & Rodríguez, Carlos Jorge & Benavides, Juan & Alonso, Julio César, 2001. "Participación Privada en Proyectos de Infraestructura y Determinantes de los Esquemas Contractuales Adoptados: El Caso Colombiano," IDB Publications (Working Papers) 2115, Inter-American Development Bank.
    15. Monica Giulietti & Catherine Waddams Price, 2005. "Incentive Regulation and Efficient Pricing," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 76(1), pages 121-149, March.
    16. Urs Meister, 2005. "Do welfare maximising water utilities maximise welfare under common carriage?," Others 0505001, University Library of Munich, Germany.
    17. Kogan, Konstantin, 2021. "Limited time commitment: Does competition for providing scarce products always improve the supplies?," European Journal of Operational Research, Elsevier, vol. 288(2), pages 408-419.
    18. Dosi, Cesare & Easter, K. William, 2000. "Water Scarcity: Economic Approaches To Improving Management," Working Papers 14461, University of Minnesota, Center for International Food and Agricultural Policy.
    19. World Bank, 2006. "Approaches to Private Participation in Water Services : A Toolkit," World Bank Publications - Books, The World Bank Group, number 6982.
    20. Eshien Chong & Freddy Huet, 2009. "Yardstick Competition, Franchise Bidding and Firms’ Incentives to Collude," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 35(1), pages 149-169, September.
    21. Asquer, Alberto, 2011. "Liberalization and regulatory reform of network industries: A comparative analysis of Italian public utilities," Utilities Policy, Elsevier, vol. 19(3), pages 172-184.
    22. Pinto, F.S. & Costa, A.S. & Figueira, J.R. & Marques, R.C., 2017. "The quality of service: An overall performance assessment for water utilities," Omega, Elsevier, vol. 69(C), pages 115-125.
    23. J.A. den Hertog, 2010. "Review of economic theories of regulation," Working Papers 10-18, Utrecht School of Economics.
    24. Johann Wackerbauer, 2003. "Regulierungsmodelle für die öffentliche Wasserversorgung und ihre Wettbewerbseffekte," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 56(21), pages 9-16, November.

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