TECHNICAL EFFICIENCY OF RURAL WATER UTILITIES

Arunava Bhattacharyya · Rangesan Narayanan · Kambiz Raffiee

33 citations0/0 files storedRePEc: Research Papers in Economics

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Efficiency Analysis Using DEA Water Resource Management and Quality Water Governance and Infrastructure

Abstract

Technical efficiency of rural water utilities is determined using frontier production functions. An indirect production function is developed to model the two-step production process of a local government-controlled firm. Data from 26 rural Nevada water utilities are used to estimate inefficiency in terms of firm-specific variables. A multistep estimation procedure is used instead of single-step maximum likelihood estimation. Model selection tests are used to choose the best model. Privately owned utilities are most efficient; self-governing water districts are the least efficient. Municipal governments operate the most and least efficient utilities.

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References

1957The Measurement of Productive Efficiency 1977Formulation and estimation of stochastic frontier production function models 1982On the estimation of technical inefficiency in the stochastic frontier production function model 1990Modern industrial organization 1980Likelihood functions for generalized stochastic frontier estimation 1990A Gamma-distributed stochastic frontier model 1991Systematic Departures from the Frontier: A Framework for the Analysis of Firm Inefficiency 1983Public Versus Private Water Delivery: A Hedonic Cost Approach

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