Regulation and efficiency incentives: evidence from the England and Wales water and sewerage industry
Erbetta, Fabrizio and Cave, Martin. (2007) Regulation and efficiency incentives: evidence from the England and Wales water and sewerage industry. Review of Network Economics, Vol.6 (No.4). Article 1. ISSN 1446-9022
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Official URL: http://dx.doi.org/10.2202/1446-9022.1128
This paper evaluates the impact of the tightening in price cap by OFWAT and of other operational factors on the efficiency of water and sewerage companies in England and Wales using a mixture of data envelopment analysis and stochastic frontier analysis. Previous empirical results suggest that the regulatory system introduced at privatization was lax. The 1999 price review signaled a tightening in regulation which is shown to have led to a significant reduction in technical inefficiency. The new economic environment set by price-cap regulation acted to bring inputs closer to their cost-minimizing levels from both a technical and allocative perspective.
|Item Type:||Journal Article|
|Subjects:||H Social Sciences > HD Industries. Land use. Labor|
|Divisions:||Faculty of Social Sciences > Warwick Business School|
|Library of Congress Subject Headings (LCSH):||Great Britain. Office of Water Services, Water utilities -- Economic aspects -- Great Britain, Sewerage -- Great Britain, Public utilities -- Government policy -- Great Britain, Sewage disposal plants -- Efficiency -- Great Britain|
|Journal or Publication Title:||Review of Network Economics|
|Official Date:||December 2007|
|Page Range:||Article 1|
|Access rights to Published version:||Open Access|
Anwandter, L. and T. Ozuna (2002) “Can Public Sector Reforms Improve the Efficiency of Public Water Utilities?” Environment and Development Economics, 7: 687-700.
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