The Cost Efficiency of Water Utilities: When Does Public Ownership Matter?

Local Government Studies, Forthcoming

30 Pages Posted: 19 Jun 2016

See all articles by Silvia Pazzi

Silvia Pazzi

University of Leicester - School of Management

Emili Tortosa-Ausina

Jaume I University - Department of Economics

Meryem Duygun Fethi

University Leicester School of Management

Simona Zambelli

University of Florence

Multiple version iconThere are 2 versions of this paper

Date Written: April 28, 2016

Abstract

This study explores the impact of different ownership types on the efficiency of water utilities. Theories and evidence have shown a puzzling relationship between ownership and performance. Moreover, relatively recent contributions (Andrews et al., 2011) have argued that this relationship can be further convoluted by the effect of organisational and environmental variables. The current study aims to contribute to this literature by providing some empirical evidence for Italy, by proposing a methodology that combines nonparametric efficiency estimation and cluster analysis. Our main findings indicate that privately owned utilities indirectly controlled by a public organisation reach the highest level of efficiency but, when size and geographical location enter the analysis, ownership has a stronger significant effect on efficiency, and mixed utilities gain higher cost efficiency. Therefore, we may conclude that administrative reforms about privatisation and the institutional setting should consider a set of variables that characterise each individual organisation.

Keywords: efficiency, geographical location, ownership, size, water utilities

JEL Classification: H4, H7, H83

Suggested Citation

Pazzi, Silvia and Tortosa-Ausina, Emili and Fethi, Meryem Duygun and Zambelli, Simona, The Cost Efficiency of Water Utilities: When Does Public Ownership Matter? (April 28, 2016). Local Government Studies, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2796742

Silvia Pazzi

University of Leicester - School of Management ( email )

Leicester
Leicester, Leicestershire LE1 7RH
United Kingdom

HOME PAGE: http://www2.le.ac.uk/departments/management/people/spazzi

Emili Tortosa-Ausina (Contact Author)

Jaume I University - Department of Economics ( email )

Campus del Riu Sec.
E-12071 Castellon
Spain

Meryem Duygun Fethi

University Leicester School of Management ( email )

University Leicester
School of Management
Leicester, LE1 7RH
United Kingdom

HOME PAGE: http://www.le.ac.uk/ulsm/academics/mfethi.html

Simona Zambelli

University of Florence ( email )

Department of Economics and Management
Via delle Pandette 9
FIRENZE, FI 50127
Italy

HOME PAGE: http://https://www.unifi.it/p-doc2-0-0-A-3f2c352f362e31.html

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