Elsevier

Utilities Policy

Volume 17, Issues 3–4, September–December 2009, Pages 233-244
Utilities Policy

Productivity and efficiency in the water industry

https://doi.org/10.1016/j.jup.2009.05.001Get rights and content

Abstract

Over the past twenty years there has been increasing interest in the productivity and efficiency of, and the optimal structures for, the water supply and wastewater industries. In part this interest has manifested itself in the increased use of numerous statistical techniques to determine the productivity and efficiency of the water sector in a variety of countries. The purpose of this paper is threefold. First it briefly reviews the various measures that have been used to gauge the levels of productivity and efficiency in the water sector, with particular reference to input and output data requirements of these measures. Second it summarises the key structural findings that have been determined from this research, particularly with respect to economies of scale and scope, public versus private ownership and the impact of regulation. Third, it considers potential areas for potential future research, such as the effect of environmental management activities (including water conservation) and regulation on productivity and efficiency, the role of wastewater as a potential source of potable or ‘fit-for-purpose’ water and the relationship between water supply and urban planning.

Section snippets

Industry structure

Industry structures in the water sector vary across the world – in the range of activities that individual businesses undertake, geographical size, the number and nature of customers they service, the extent of private sector involvement, the scope of competition (if any), the nature and extent of regulation, and the bodies upon whom responsibility for overseeing and/or implementing that regulation is placed.

In general, the range of activities that water businesses may undertake include: bulk

Part III

Research on productivity and efficiency in the water sector undertaken to date, and the methodologies utilised, has been diverse. Up until the 1990s the tendency for studies was to concentrate on the issues of the existence of economics of scale in the industry and the effects of public versus private ownership. This was mainly because the main issues at the time were the possible advantages that might be obtained from merging water suppliers into larger units and the existence in the United

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    The views contained in this paper are those of the author only, and do not represent those of Melbourne Water.

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