Nontransferable Water Rights and Technical Inefficiency in the Japanese Water Supply Industry

Eiji Satoh

Global COE Hi-Stat Discussion Paper Series from Institute of Economic Research, Hitotsubashi University

Abstract: This study examines whether the Japanese scheme of nontransferable water rights results in technical inefficiency. Using data on 1,263 Japanese retail water suppliers for 2008, their technical efficiency is measured employing data envelopment analysis. Next, a bootstrapped truncated regression model is specified to examine the determinants of technical efficiency. The estimation results reveal that the nontransferability of water rights leads to technical inefficiency of retail water suppliers. Furthermore, the costs of this efficiency amount to about 462 billion yen. This result suggests the government should reallocate water rights flexibly in order to ensure efficiency.

Keywords: Bootstrapped Truncated Regression; Data Envelopment Analysis; Technical Efficiency; Water Rights (search for similar items in EconPapers)
JEL-codes: L51 L95 Q25 (search for similar items in EconPapers)
Date: 2011-12
New Economics Papers: this item is included in nep-agr and nep-eff
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Persistent link: https://EconPapers.repec.org/RePEc:hst:ghsdps:gd11-211

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