Efficiency of Brazilian public and private water utilities
DOI:
https://doi.org/10.1590/S0101-41612008000400008Keywords:
water supply, stochastic frontier, cost efficiency, panel dataAbstract
This paper compares cost efficiencies of Brazilian public and private companies of water supply. To measure efficiency a Cobb-Douglas stochastic cost frontier model including technical effects is estimated by maximum likelihood to a panel of Brazilian firms for the period 2002 -2004. The statistical results indicate that there is evidence that public firms are more efficient although the difference in efficiency is declining over time. Overall the system of water and sewerage supply is becoming more efficient over time.Downloads
References
Ashto n, J. Cost efficiency in the UK water and sewerage industry. Applied Economics Letters, 7, p. 455-458, 2000.
Bhattacha ryya, A.; Pa rker, E.; Raffi ee, K. An examination of the effect of ownership on the relative efficiency of public and private water utilities. Land Economics, May, v.70, n.2, p.197-209, 1994.
Bhattacha ryya, A.; Harris, T.R.; Raffi ee, K. Allocative efficiency of rural Nevada water system: a hedonic shadow cost function approach. Journal of Regional Science, v. 35, n.3, p.485-501, 1995a.
Bhattacha ryya, A.; Harris, T.R.; Raffi ee, K. Specification and estimation of the effect of ownership on the economic
efficiency of the water utilities. Regional Science and Urban Economics, 25, p.759-84, 1995b.
Bruggink, T. Public versus regulated private enterprise in the municipal water industry: a comparison of operating costs. Quarterly Review of Economics and Business, v. 22, n.1, p.111-125, 1982.
Byners, P.; Grossko pf, S.; Hayes, K. Efficiency and ownership: further evidence. Review of Economics and Statistics, v. 68, n.2, p.337-341, 1986.
Byners, P. Estimation of cost frontiers in the presence of selectivity bias: ownership and efficiency of water utilities. In: Rhodes, G. (ed.), Advances in Econometrics, 9, p.121-137, 1991.
Coelli, T.; Rao , D. S. Prasada.; Batt ese, George E. An introduction to efficiency and productivity analysis. Kluwer Academic Publishers, 1998.
Crain, W. Mark; Zardkoohi , A. A test of the property-rights theory of the firm: water utilities in the United States. Journal of Law and Economics, 21, p. 395-408, 1978.
Cubbin, J.; Tzanidakis , G. Regression versus data envelopment analysis for efficiency measurement: an application to the England and Wales regulated water industry. Utilities Policy, 7, p.75-85, 1998.
Emercia no, E.; Balta r, L. A. Flexibilização institucional da prestação de serviços de saneamento: implicações e desafios. In: Acqua-Plan - Estudos, Projetos e Consultoria. Brasília: Ministério do Planejamento e Orçamento. Secretaria de
Política Urbana/IPEA, 1995. (Série Modernização do Setor Saneamento, 3).
Estach e, Antonio; Rossi, Martín A. How different is the efficiency of public and private water companies in Asia? The World Bank Economic Review, v.16, n.1, p. 139-148, 2002.
Estach e, Antonio; Trujillo, Lourdes. Efficiency effects of “privatization” in Argentina’s water and sanitation services. World Bank, 2003. (Working Paper)
Faria, S. A.; Faria, R. C. Cenários e perspectivas para saneamento e sua interface com o setor de recursos hídricos. Revista de Engenharia Sanitária e Ambiental, v.9, n. 3, p. 202-210, 2004.
Faria, Ricardo C.; Souza, Geraldo da S.; Moreira, Tito Belchior S. Public versus private water utilities: empirical evidence for Brazilian companies. Economics Bulletin, v.8, n.2, p.1-7, 2005.
Feigenbaum, S.; Teeples, R. Public versus private water delivery: a hedonic cost approach. Review of Economics and Statistics, 65, p. 672-678, 1983.
Fox, W.; Hofler, R. Using homothetic composed error frontiers to measure water utility efficiency. Southern Economic Journal, 53, n. 2, p. 461-477, 1986.
Khumbhaka r, S.C.; Lovell , C.A.K. Stochastic frontier analysis. NY : Cambridge University Press, 2000.
Laffont, Jean-Jacques; Tirole, Jean. A theory of incentives in procurement and regulation. Cambridge, Massachusetts, London, England: The MIT press, 1993.
Morgan, D. Investor owner vs. public owned water agencies: an evaluation of the property rights theory of the firm. Water Resources Bulletin, v.13, n. 4, p. 775-781, 1997.
Parlato re, A. C. Privatização do setor de saneamento no Brasil. In: A privatização no Brasil: caso dos serviços de utilidade pública. Rio de Janeiro: BNDES, 2000.
Pereira, D. S. P.; Balta r, L. A.; Abicalli, e. M. T. Saneamento: modernização e parceria com o setor privado. Brasília: Ministério do Planejamento e Orçamento. Secretaria de Política Urbana/IPEA, 1995. (Série Modernização do Setor Saneamento, 9).
Raffi ee, K., Narayanan, R.; Harris, T., Lambert, D.; Collins, J. Cost analysis of water utilities: a goodness-of-fit approach. Atlantic Economic Journal, v. 21, n.3, p.18-29, 1993.
Rezende, F. Novo modelo de financiamento para o setor saneamento. Brasília: Ministério do Planejamento e Orçamento. Secretaria de Política Urbana/IPE A, 1995. (Série Modernização do Setor Saneamento, v. 2).
Saal, David S.; Parker, D. The impact of privatization and regulation on the water and sewerage industry in England and Wales: a translog cost function model. Managerial and Decisions Economics, 21, p. 253-268, 2000.
Saal, David S.; Parker, D. Productivity and price performance in the privatized water and sewerage companies of England and Wales. Journal of Regulatory Economics, v. 20, n.1, p. 61-90, 2001.
Saal, David S.; Parker, D; Weyman-Jones, Tom. Determining the contribution of technical, efficiency,
and scale change to productivity growth in the privatized English and Welsh water and sewerage industry: 1985:2000. Aston Business School Working Paper RP0433, December 2004.
Saal, David S.; Pa rker, D. Assessing the performance of water operations in the English and Welsh water industry: A panel input function approach. Aston Business School Working Paper RP0502, January 2005.
Shao ul, J. A critical financial analysis of the performance of privatized industries: the case of the water industry in England and Wales. Critical Perspectives on Accounting, 8, p.479-505, 1997.
Spiller, P. T.; Savedoff, W. D. Government opportunism and the provision of water. In: Savedoff, W. D; Spiller, P. T. Spilled water: institutional commitment in the provision of water services. Washington, D. C.: Inter American Development Bank, 1999.
Silva, J. A. C. Diagnóstico do setor saneamento: estudo econômico e financeiro. Aliança - Pesquisa e Desenvolvimento. Brasília: Ministério do Planejamento e Orçamento.
Secretaria de Política Urbana/IPE A, 1995, 251p. (Série Modernização do Setor Saneamento).
Souza, Geraldo da S.; Faria, Ricardo C.; Moreira, Tito Belchior S. Estimating the relative efficiency of Brazilian publicly and privately owned water utilities: a stochastic cost frontier approach. Journal of the American Water Resources Association
- JAWRA, forthcoming, 2007.
Teeples, R.; Glyer, D. Cost of water delivery systems: specifications and ownership effects. Review of Economics and Statistics, v. 69, n.3, p. 399-408, 1987.
Tupper, Henrique S.; Resende, M. Efficiency and regulatory issues in the Brazilian water and sewage sector: an empirical study. Utilities Policy 12, p.12-40, 2004.
Downloads
Published
Issue
Section
License
Copyright (c) 2008 Geraldo da Silva e Souza, Ricardo Coelho de Faria, Tito Belchior S. Moreira
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
By submitting an article, the author authorizes its publication and attests that it has not been submitted to any other journal. The original article is considered final. Articles selected for publication are proofread for grammatical and orthographic errors. The journal does not pay rights for published articles. The Institute of Economic Research from the School of Economics, Business and Accounting of the University of São Paulo (Instituto de Pesquisas Econômicas da Faculdade de Economia, Administração e Contabilidade da Universidade de São Paulo) owns the journal's copyright.
