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Firm-level inefficiency and its determinants in the Swedish water and wastewater sector

Abstract : The Swedish Water and Wastewater (WW) utilities are subject to a cost-of-service regulation with no regulatory incentives to reduce costs. An estimation of firm-level inefficiency using stochastic frontier models on a cross-sectional sample of 148 utilities from 2006 suggests that overall the sector has at least a 15% cost reduction potential. Utilities can increase efficiency by reducing network losses. The cost frontier shifts to a higher level when (1) two or more municipalities merge their WW operations and when (2) utilities receive tax subsidies.
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https://hal-mines-paristech.archives-ouvertes.fr/hal-00768603
Contributor : Yann Ménière <>
Submitted on : Saturday, December 22, 2012 - 9:34:50 AM
Last modification on : Wednesday, October 14, 2020 - 3:48:08 AM

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Magnus Söderberg. Firm-level inefficiency and its determinants in the Swedish water and wastewater sector. Applied Economics Letters, Taylor & Francis (Routledge): SSH Titles, 2011, 18 (12), pp.1149-1153. ⟨10.1080/13504851.2010.528349⟩. ⟨hal-00768603⟩

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