Impact of external costs of unplanned supply interruptions on water company efficiency: Evidence from Chile |
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| Affiliation: | 1. Departamento de Ingeniería Hidráulica y Ambiental, Pontificia Universidad Católica de Chile, Av. Vicuña Mackenna 4860, Santiago, Chile;2. Escuela de Arquitectura e Instituto de Estudios Urbanos, Pontificia Universidad Católica de Chile, El Comendador 1916, Santiago, Chile;3. Centro de Desarrollo Urbano Sustentable CONICYT/FONDAP/15110020, Av. Vicuña Mackenna 4860, Santiago, Chile;4. Department of Mathematics for Economics, University of Valencia, Avd. Tarongers S/N, Valencia, Spain |
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| Abstract: | Conventional performance assessments of water companies ignore the external costs due to water supply outages. To overcome this gap, we evaluate the impact of external costs of unplanned supply interruptions on the efficiency of water companies. Two efficiency metrics, internal technical efficiency (ITE), and total technical efficiency (TTE), were estimated based on data envelopment analysis (DEA). The results evidence that the external costs of unplanned water supply interruptions impact, on average, 7.9% of the efficiency of water companies. We also explored the impact of a set of environmental variables on water company efficiency. |
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| Keywords: | Water supply interruptions Water industry Benchmarking |
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