An Analysis of Inefficiency of Big Urban Water Utilities in Latin-America

Produced by: 
Universidad del Pacifico
Available from: 
2014
Paper author(s): 
José Luis Bonifaz (Departamento de Economía, Universidad del Pacífico)
Reyk Itakura
Topic: 
Agricultural - Natural Resource Economics
Environmental Economics
Year: 
2014

This study uses a stochastic frontier parametrical approach to analyze the inefficiency of firms in the water industry between 1999 and 2010. For this purpose, an unbalanced panel of data from 12 firms from all over Latin America was used. One of the main findings of the study is that companies from the private sector outperform those from the public sector over time. Another conclusion is that there are no economies of scale or density, considering the actual size of the average sector. Finally, inefficiency shows a positive correlation with the firms’ size and with the length of the network.

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