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Trade-off between water loss and water infrastructure quality: A cost minimization approach

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Abstract

In this paper, we focus on the issue of water loss caused by leakage from obsolete water mains. We develop in this theoretical paper, a cost minimization problem of a water utility that faces leakage from water mains. Our framework enables us to determine the optimal water main quality index according to different parameters such as the cost of water production, the quantity demanded and the cost of installing good quality water mains

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  • Elissa Cousin & Emmanuelle Taugourdeau, 2015. "Trade-off between water loss and water infrastructure quality: A cost minimization approach," Documents de travail du Centre d'Economie de la Sorbonne 15016, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    • Handle: RePEc:mse:cesdoc:15016
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    References listed on IDEAS

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    1. Serge Garcia & Alban Thomas, 2003. "Regulation of Public Utilities under Asymmetric Information," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 26(1), pages 145-162, September.
    2. Eshien Chong & Freddy Huet & Stéphane Saussier & Faye Steiner, 2006. "Public-Private Partnerships and Prices: Evidence from Water Distribution in France," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 29(1), pages 149-169, September.
    3. Rita Martins & Fernando Coelho & Adelino Fortunato, 2012. "Water losses and hydrographical regions influence on the cost structure of the Portuguese water industry," Journal of Productivity Analysis, Springer, vol. 38(1), pages 81-94, August.
    4. Serge Garcia & Alban Thomas, 2001. "The Structure of Municipal Water Supply Costs: Application to a Panel of French Local Communities," Journal of Productivity Analysis, Springer, vol. 16(1), pages 5-29, July.
    5. Feigenbaum, Susan & Teeples, Ronald, 1983. "Public versus Private Water Delivery: A Hedonic Cost Approach," The Review of Economics and Statistics, MIT Press, vol. 65(4), pages 672-678, November.
    6. Jihad Elnaboulsi, 2009. "An Incentive Water Pricing Policy for Sustainable Water Use," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 42(4), pages 451-469, April.
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    Cited by:

    1. Amor, Tawfik Ben, 2022. "The generalised translog cost function to estimate tariffs for potable water: The case of Tunisia," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 17(4), March.

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    More about this item

    Keywords

    Water Loss; infrastructure quality; cost minimization;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • Q21 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Demand and Supply; Prices
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water

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