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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Abstract

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
Publisher:	Bepress
ISSN:	1446-9022
Date:	December 2007
Volume:	Vol.6
Number:	No.4
Page Range:	Article 1
Identification Number:	10.2202/1446-9022.1128
Status:	Peer Reviewed
Access rights to Published version:	Open Access
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URI:	http://wrap.warwick.ac.uk/id/eprint/2251

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