Evaluation of the influence of economic groups on the efficiency and quality of service of water companies: an empirical approach for Chile

Evaluation of the influence of economic groups on the efficiency and quality of service of water... The privatization of water and sewerage services (WSS) has led to the foundation of water economic groups, which integrate several water companies and have gained notable importance at the global level. In the framework of benchmarking studies, there are no prior studies exploring the impact that economic groups have on the efficiency and quality of service provided by water companies. This study investigates, for the first time, whether the membership of water companies in an economic group influences their performance. Quantity- and quality-adjusted efficiency scores were computed using data envelopment analysis models. An empirical application was developed for the Chilean water industry since most of their water companies are private and belong to an economic group. The results show that independent water companies provide WSS with better quality than do water companies that belong to an economic group. From a statistical point of view, it was evident that membership in an economic group impacts both the quantity- and quality-adjusted efficiency scores of water companies. The results of this study illustrate that applying the model-firm regulation to the Chilean water industry has significant drawbacks that should be addressed by the water regulator to promote the long-term sustainability of the water http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Environmental Science and Pollution Research Springer Journals

Evaluation of the influence of economic groups on the efficiency and quality of service of water companies: an empirical approach for Chile

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Publisher
Springer Berlin Heidelberg
Copyright
Copyright © 2018 by Springer-Verlag GmbH Germany, part of Springer Nature
Subject
Environment; Environment, general; Environmental Chemistry; Ecotoxicology; Environmental Health; Atmospheric Protection/Air Quality Control/Air Pollution; Waste Water Technology / Water Pollution Control / Water Management / Aquatic Pollution
ISSN
0944-1344
eISSN
1614-7499
D.O.I.
10.1007/s11356-018-2363-x
Publisher site
See Article on Publisher Site

Abstract

The privatization of water and sewerage services (WSS) has led to the foundation of water economic groups, which integrate several water companies and have gained notable importance at the global level. In the framework of benchmarking studies, there are no prior studies exploring the impact that economic groups have on the efficiency and quality of service provided by water companies. This study investigates, for the first time, whether the membership of water companies in an economic group influences their performance. Quantity- and quality-adjusted efficiency scores were computed using data envelopment analysis models. An empirical application was developed for the Chilean water industry since most of their water companies are private and belong to an economic group. The results show that independent water companies provide WSS with better quality than do water companies that belong to an economic group. From a statistical point of view, it was evident that membership in an economic group impacts both the quantity- and quality-adjusted efficiency scores of water companies. The results of this study illustrate that applying the model-firm regulation to the Chilean water industry has significant drawbacks that should be addressed by the water regulator to promote the long-term sustainability of the water

Journal

Environmental Science and Pollution ResearchSpringer Journals

Published: Jun 4, 2018

References

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