scholarly journals Examining the economies of scale of water and sewage utilities in the urban sector: the case of Israel

Water Policy ◽  
2016 ◽  
Vol 19 (2) ◽  
pp. 257-270 ◽  
Author(s):  
Doron Lavee ◽  
Sefi Bahar
Keyword(s):  
Economies Of Scale ◽  
Returns To Scale ◽  
Water Utilities ◽  
Distinct Advantage ◽  
Optimal Size ◽  
Urban Water ◽  
Water Production ◽  
Translog Cost Function ◽  
Water Sector ◽  
Urban Sector

This study applies econometric tools to examine the economies of scale of the water and sewage utilities corporation (utilities) in the urban sector in Israel, and to find whether reducing the number of utilities will maximize efficiency in the urban water sector. Using an econometric analysis of an elasticity Translog cost function, which allows the estimation of returns to scale, the authors examined the optimal size for water and sewage utilities in Israel, based on panel data of 51 utilities. According to the study's results, there is a distinct advantage of economies of scale in Israel's water utilities, and the current distribution of the urban water sector in Israel is characterized by inefficiency and high cost. The results indicate that reducing the number of utilities will achieve an increase in water quantities by utility, and the costs of water production will decline due to economies of scale.

Performance of Portuguese water utilities: how do ownership, size, diversification and vertical integration relate to efficiency?

Water Policy ◽  
2010 ◽  
Vol 13 (3) ◽  
pp. 343-361 ◽  
Author(s):  
Tânia Correia ◽  
Rui Cunha Marques
Keyword(s):  
Vertical Integration ◽  
Economies Of Scale ◽  
Stochastic Frontier Analysis ◽  
Stochastic Frontier ◽  
Water Utilities ◽  
Economies Of Scope ◽  
Translog Cost Function ◽  
Water Sector ◽  
Frontier Analysis ◽  
Portuguese Water

This research applies the stochastic frontier analysis benchmarking method to measure the performance of the water sector in Portugal. It estimates a multiproduct translog cost function in order to study the efficiency of the water and sewerage services, using an unbalanced panel comprising 68 Portuguese water utilities for the biennium 2004–2005. The sample is formed by concessionaire companies, municipal companies and semi-autonomous utilities which represent approximately 61% of the Portuguese population, around 6.4 million inhabitants. The water utilities studied have a satisfactory level of efficiency (89% on average). The study points to the assumption that private utilities are, on average, more efficient than public utilities and that there are benefits if the companies specialize in providing a single activity. It also leads to the conclusion that there are increasing economies of scale and decreasing economies of scope associated with the Portuguese water sector.

scholarly journals The challenge of effective policy implementation in Nigerian urban water utilities

2017 ◽  
Vol 18 (5) ◽  
pp. 1696-1705
Author(s):  
O. M. Imonikhe ◽  
K. Moodley
Keyword(s):  
Policy Implementation ◽  
Implementation Process ◽  
Water Utilities ◽  
Urban Water ◽  
Water Sector ◽  
Water Legislation ◽  
The Usa ◽  
Effective Policy ◽  
Subject Areas ◽  
The Uk

Abstract The effectiveness of policy implementation is rapidly becoming a widely researched area in the water sector. Previously, most studies focused mainly on developing technical innovations for delivering sustainable water services and little attention was given to subject areas such as governance, policy implementation, and legislation. Now, water professionals and policy makers are beginning to recognise that efficient services occur when social, political, economic, environmental and technical issues are taken into consideration; hence, subject areas like policy implementation have started receiving attention as well. Thus, many nations such as the UK, Australia, and the USA are constantly aiming to establish best institutional practices for their water sector, while countries such as Nigeria are yet to establish effective policy implementation processes. This research examines the challenge of effective policy implementation in Nigerian urban water utilities. The research showed that policies and legislation developed were of commendable standards, but the implementation process was predominantly hindered by five factors. Hence, these factors will need to be managed actively if the Nigerian urban sector wishes to achieve the intended results from water legislation and policies.

scholarly journals Economies of scale in the water sector: a survey of the empirical literature

2011 ◽  
Vol 1 (3) ◽  
pp. 179-193 ◽  
Author(s):  
Gustavo Ferro ◽  
Emilio J. Lentini ◽  
Augusto C. Mercadier
Keyword(s):  
Economies Of Scale ◽  
Universal Access ◽  
Unit Cost ◽  
Returns To Scale ◽  
Empirical Literature ◽  
Water Sector ◽  
Unit Costs ◽  
Proportional Change ◽  
Constant Returns To Scale ◽  
The Relationship

The issue of the most favorable size and optimal industry structure in the water sector is a relevant topic in many countries, due to fragmentation of the water sector and the key role played by municipalities. Important debates are taking place worldwide about how to provide universal access to the water supply and offer an efficient service. Regarding efficiency, the possibility of exploiting economies of scale would imply better resource allocation, the potential for lower water charges, and greater geographical coverage. By surveying the empirical research from different parts of the world, we aim to shed some light on the topic of economies of scale, and to provide a synthesis of the literature. We also aim to determine whether there is a tradeoff between centralization and decentralization. Our survey shows that, for several countries, variations in efficiency of water provision due to economies of scale do exist. Increases in efficiency related to economies of scale are found for populations in the range of 100,000 to 1 million people served. For larger populations, volume- or density-constant returns to scale are observed, followed by decreasing returns to scale; the reverse occurs for smaller values, suggesting that cost savings are derived from consolidation of providers. [Returns to scale refer to changes in output resulting where all inputs increase by a constant factor. If output increases by that same proportional change, then there are constant returns to scale. If output increases by less than that proportional change, there are decreasing returns to scale. If output increases by more than that proportional change, there are increasing returns to scale. Returns to scale is a technological phenomenon, due to the relationship between inputs and outputs in the production function. Economies of scale refer to reductions in unit cost as the scale of production increases. Diseconomies of scale are the opposite: increasing in unit costs as the scale of production increases. Scale changes mean a proportional increase in all factors of production. Economies of scale are a economical phenomenon, due to the relationship between unit costs and the level of production.]

Measuring the performance of water service providers in urban India: implications for managing water utilities

Water Policy ◽  
2012 ◽  
Vol 14 (3) ◽  
pp. 391-408 ◽  
Author(s):  
Shreekant Gupta ◽  
Surender Kumar ◽  
Gopal K. Sarangi
Keyword(s):  
Service Providers ◽  
Returns To Scale ◽  
Supply System ◽  
Water Utilities ◽  
Data Envelopment ◽  
Urban Water ◽  
Urban Water Supply ◽  
Domestic Water ◽  
Functional Autonomy ◽  
Indian Cities

This study assesses the efficiency of the urban water supply system in 27 selected Indian cities. It applies data envelopment analysis (DEA) as an analytical tool to measure technical efficiency. Cities are categorized into different groups according to the management structure of their water utilities. The results show that within groups, the utilities that are managed by ‘municipal corporations (MCs) and parastatals', with a certain amount of functional autonomy, perform better in comparison to the group ‘MCs and government’ and thus, strengthen the hypothesis that functional autonomy in management leads to better performance of the water utilities. Moreover, the results also have implications for urban domestic water pricing. We find that most water utilities are operating under decreasing returns to scale (DRS), implying that water should be priced at a marginal cost of supply.

scholarly journals Economies of scale and scope in Australian urban water utilities

2014 ◽  
Vol 31 ◽  
pp. 52-62 ◽  
Author(s):  
Andrew C. Worthington ◽  
Helen Higgs
Keyword(s):  
Economies Of Scale ◽  
Water Utilities ◽  
Urban Water

Economic effects of the consolidation of water utilities in Japan

2014 ◽  
Vol 14 (5) ◽  
pp. 909-916 ◽  
Author(s):  
Masao Shibuya ◽  
Francesc Hernández-Sancho ◽  
María Molinos-Senante
Keyword(s):  
Water Management ◽  
Economies Of Scale ◽  
Economic Effects ◽  
Water Utilities ◽  
Small Scale ◽  
Urban Water ◽  
Urban Water Management ◽  
Empirical Application ◽  
Japanese Water

Water utilities are affected by economies of scale. However, in Japan most water utilities are small-scale water services. Therefore, they face enormous difficulties in terms of financial and personnel resources. To take advantage of economies of scale, the consolidation of water utilities has been promoted since 1965 by Japanese water authorities. The measure has been successful to some extent; nevertheless, consolidation has not progressed in recent years as was expected. This paper identifies the main barriers that hinder the consolidation of water utilities in Japan and describes the new promotion plan for the consolidation of water utilities developed by the Japan Water Works Association. To assess the economic effects of consolidation, an empirical application is carried out involving four real Japanese cities. The results will be useful to water authorities considering consolidation in the long-term planning of urban water management.

Benchmarking Risk Analysis Practice in the International Water Sector

2006 ◽  
Vol 1 (2) ◽  
Author(s):  
B.H. MacGillivray ◽  
P.D. Hamilton ◽  
S.E. Hrudey ◽  
L. Reekie ◽  
S.J.T Pollard
Keyword(s):  
Decision Making ◽  
Risk Analysis ◽  
Water Utilities ◽  
Water Sector ◽  
Water Utility ◽  
Analysis Techniques ◽  
The Usa ◽  
International Water ◽  
Practical Guidance ◽  
The Uk

Risk analysis in the water utility sector is fast becoming explicit. Here, we describe application of a capability model to benchmark the risk analysis maturity of a sub-sample of eight water utilities from the USA, the UK and Australia. Our analysis codifies risk analysis practice and offers practical guidance as to how utilities may more effectively employ their portfolio of risk analysis techniques for optimal, credible, and defensible decision making.

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