Regulation and Management Mode: An Econometric Study of Pricing and Performance in Drinking Water Provision
44 Pages Posted: 8 Jan 2009 Last revised: 14 Jan 2009
Date Written: September 1, 2008
We model the interactions between management regimes (municipal vs. delegated) and operating costs of water supply services in order to compare their performance and pricing. We estimate the models from panel data in France. We show that the choice between management regimes at the local community level depends on costs and service characteristics, that there is a significant difference in average productive efficiency in favor of delegated services, and that municipal services appear more efficient in network returns. Under delegation, the margins realized by operators depend on service and contract characteristics.
Keywords: water supply services, management regime, selection model, cost function, pricing, panel data
JEL Classification: C25, C33, D42, L25, L95
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