Abstract
In monopoly services that provide drinking water, it is of paramount importance to evaluate the total factor productivity (TFP) change of water companies. Most of the previous studies have computed the Malmquist productivity index (MPI) by applying non-parametric methods. By contrast, following a pioneering approach, in this study, we estimated the MPI using a parametric method that allows us to decompose TFP change into a larger number of drivers, including exogenous and quality of service variables. An empirical application for the Chilean water industry over 2007–2015 was conducted. We found that productivity change estimates were variable across years, differentiating a first period (2007/11) in which productivity declined and a second period (2011/15) in which TFP notably improved. In both periods, scale efficiency change and input mixed effect were the main drivers of productivity change, illustrating the importance of operation scale in water companies’ performance. The decomposition of the TFP change in a large number of drivers is essential to propose incentives and measures to promote productivity across time.
Similar content being viewed by others
References
Ali MK, Klein KK (2014) Water use efficiency and productivity of the irrigation districts in southern Alberta. Water Resour Manag 28(10):2751–2766
Ananda J (2018) Productivity implications of the water-energy-emissions nexus: an empirical analysis of the drinking water and wastewater sector. J Clean Prod 196:1097–1105
Awad H, Gar Alalm M, El-Etriby HK (2019) Environmental and cost life cycle assessment of different alternatives for improvement of wastewater treatment plants in developing countries. Sci Total Environ 660:57–68
Balk BM (2001) Scale efficiency and productivity change. J Prod Anal 15:159–183
Berg S, Marques R (2011) Quantitative studies of water and sanitation utilities: a benchmarking literature survey. Water Policy 13(5):591–606
Cetrulo TB, Marques RC, Malheiros TF (2019) An analytical review of the efficiency of water and sanitation utilities in developing countries. Water Res:372–380
Coelli TJ, Estache A, Perelman S, Trujillo L (2003) A primer on efficiency measurement for utilities and transport regulators. World Bank Publications
De Witte K, Marques RC (2012) Gaming in a benchmarking environment. A non-parametric analysis of benchmarking in the water sector. Water Policy 14(1):45–66
Färe R, Grosskopf S, Lindgren B, Roos P (1992) Productivity changes in Swedish pharamacies 1980-1989: a non-parametric Malmquist approach. J Prod Anal 3(1–2):85–101
Fare R, Grifell-Tatje E, Grosskopf S, Lovell CAK (1997) Biased technical change and the Malmquist productivity index. Scand J Econ 99:119–127
Ferro G, Mercadier AC (2016) Technical efficiency in Chile’s water and sanitation provides. Util Policy 43:97–106
Fuentes HJ, Grifell-Tatje E, Perelman S (2001) A parametric distance function approach for Malmquist productivity index estimation. J Prod Anal 15:79–94
Gandhi AV, Sharma D (2018) Technical efficiency of private sector hospitals in India using data envelopment analysis. Benchmarking 25(9):3570–3591
Greene W (2005) Fixed and random effects in stochastic frontier models. J Prod Anal 23(7):7–32
Grifell-Tatjé E, Lovell CAK (1997) A DEA-based analysis of productivity change and intertemporal managerial performance. Ann Oper Res 73:177–189
Guan B, Liu X, Zhang T, Xia J (2018) Energy consumption of subway stations in China: data and influencing factors. Sustain Cities Soc 43:451–461
Guerrini A, Romano G, Leardini C (2018) Economies of scale and density in the Italian water industry: a stochastic frontier approach. Util Policy 52:103–111
Haslinger J, Krampe J, Lindtner S (2016) Operating costs and energy demand of wastewater treatment plants in Austria: benchmarking results of the last 10 years. Water Sci Technol 74(11):2620–2626
Jan P, Lips M, Dumondel M (2012) Total factor productivity change of Swiss dairy farms in the mountain region in the period 1999 to 2008. Rev Agric Environ Stud INRA Ed 93:273–298
Kirkpatrick C, Parker D, Zhang YF (2006) An empirical analysis of state and private-sector provision of water services in Africa. World Bank Econ Rev 20(1):143–163
Marques RC, Berg S, Yane S (2014) Nonparametric benchmarking of Japanese water utilities: institutional and environmental factors affecting efficiency. J Water Resour Plan Manag 140(5):562–571
Mavi NK, Mavi RK (2019) Energy and environmental efficiency of OECD countries in the context of the circular economy: common weight analysis for Malmquist productivity index. J Environ Manag 247:651–661
Maziotis A, Molinos-Senante M, Sala-Garrido R (2017) Assessing the impact of quality of service on the productivity of water industry: a Malmquist-Luenberger productivity index approach for England and Wales. Water Resour Manag 31(8):2407–2422
Mellah T, Ben Amor T (2016) Performance of the Tunisian water utility: an input-distance function approach. Util Policy 38:18–32
Mirza FM, Mushtaq I, Ullah K (2017) Assessing the efficiency dynamics of post reforms electric distribution utilities in Pakistan. Util Policy 47:18–28
Molinos-Senante M, Maziotis A (2018a) Flexible versus common technology to estimate economies of scale and scope in the water and sewerage industry: an application to England and Wales. Environ Sci Pollut Res 25(14):14158–14170
Molinos-Senante M, Maziotis A (2018b) Assessing the influence of exogenous and quality of service variables on water companies’ performance using a true-fixed stochastic frontier approach. Urban Water J 15(7):682–691
Molinos-Senante M, Maziotis A (2019a) Productivity growth and its drivers in the Chilean water and sewerage industry: a comparison of alternative benchmarking techniques. Urban Water J 16(5):353–364
Molinos-Senante M, Maziotis A (2019b) A meta-stochastic frontier analysis for technical efficiency comparison of water companies in England and Wales. Environ Sci Pollut Res In Press
Molinos-Senante M, Sala-Garrido R (2015) The impact of privatization approaches on the productivity growth of the water industry: a case study of Chile. Environ Sci Pollut Res 50:166–179
Molinos-Senante M, Maziotis A, Sala-Garrido R (2017a) Assessment of the Total factor productivity change in the English and Welsh water industry: a Färe-Primont productivity index approach. Water Resour Manag 31(8):2389–2405
Molinos-Senante M, Porcher S, Maziotis A (2017b) Impact of regulation on English and Welsh water-only companies: an input distance function approach. Environ Sci Pollut Res 24(20):16994–17005
Molinos-Senante M, Porcher S, Maziotis A (2018) Productivity change and its drivers for the Chilean water companies: a comparison of full private and concessionary companies. J Clean Prod 183:908–916
Molinos-Senante M, Villegas A, Maziotis A (2019) Are water tariffs sufficient incentives to reduce water leakages? An empirical approach for Chile. Util Policy 61(100971)
Neamtu C (2011) The use of water balance in determining the water loss strategy. Water Util J 2:61–68
Nyathikala SA, Kulshrestha M (2017) Performance and productivity measurement of urban water supply services in India. Water Sci Technol Water Supply 17(2):407–421
Pantzios CJ, Karagiannis G, Tzouvelekas V (2011) Parametric decomposition of the input oriented Malmquist productivity index: with an application to Greek aquaculture. J Prod Anal 36:21–31
Portela MCAS, Thanassoulis E, Horncastle A, Maugg T (2011) Productivity change in the water industry in England and Wales: application of the meta-Malmquist index. J Oper Res Soc 62(12):2173–2188
Romano G, Salvati N, Guerrini A (2016) An empirical analysis of the determinants of water demand in Italy. J Clean Prod 130:74–81
Saal DS, Parker D, Weyman-Jones T (2007) Determining the contribution of technical efficiency, and scale change to productivity growth in the privatized English and Welsh water and sewerage industry: 1985–2000. J Prod Anal 28(1):127–139
Sala-Garrido R, Molinos-Senante M, Mocoli-Arce M (2018) Assessing productivity changes in water companies: a comparison of the Luenberger and Luenberger-Hicks-Moorsteen productivity indicators. Urban Water J 15(7):626–365
See KF (2015) Exploring and analysing sources of technical efficiency in water supply services: some evidence from southeast Asian public water utilities. Water Resour Econ 9:23–44
Shen X, Lin B (2017) Total factor energy efficiency of China’s industrial sector: a stochastic frontier analysis. Sustainability 9(4):646
Singbo A, Larue B (2016) Scale economies, technical efficiency and the sources of total factor productivity growth of Quebec dairy farms, Canadian Journal of Agricultural Economics 64, 339–363
SISS (2017) Management report about water and sewerage industry in Chile. Available at: http://www.siss.gob.cl/586/articles-17283_recurso_1.pdf
Song M, Wang R, Zeng X (2018) Water resources utilization efficiency and influence factors under environmental restrictions. J Clean Prod 184:611–621
Tarpani RRZ, Azapagic A (2018) Life cycle costs of advanced treatment techniques for wastewater reuse and resource recovery from sewage sludge. J Clean Prod 204:832–847
UN (2015) Sustainable development goals by United Nations. Available at: https://www.un.org/sustainabledevelopment/sustainable-development-goals/
Walker NL, Norton A, Harris I, Williams AP, Styles D (2019) Economic and environmental efficiency of UK and Ireland water companies: influence of exogenous factors and rurality. J Environ Manag 241:363–373
Yu B, Liao X, Shen X (2014) Parametric decomposition of the Malmquist index in output-oriented distance function: productivity in Chinese agriculture. Mod Econ 5:70–85
Yu-Ying Lin E, Chen P-Y, Chen C-C (2013) Measuring green productivity of country: a generalized metafrontier Malmquist productivity index approach. Energy 55:340–353
Zope R, Vasudevan N, Arkatkar SS, Joshi G (2019) Benchmarking: a tool for evaluation and monitoring sustainability of urban transport system in metropolitan cities of India. Sustain Cities Soc 45:48–58
Author information
Authors and Affiliations
Corresponding author
Additional information
Responsible editor: Philippe Garrigues
Publisher’s note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Rights and permissions
About this article
Cite this article
Molinos-Senante, M., Maziotis, A. & Sala-Garrido, R. Evaluating trends in the performance of Chilean water companies: impact of quality of service and environmental variables. Environ Sci Pollut Res 27, 13155–13165 (2020). https://doi.org/10.1007/s11356-020-07918-x
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s11356-020-07918-x