Enhancing Efficiency of Water Supply – Product Market Competition versus Trade

Reto Foellmi and Urs Meister

Public Economics from University Library of Munich, Germany

Abstract: This paper analyses and compares potential efficiency gains induced by the introduction of product market competition and cross boarder trade in the piped water market. We argue that due to the specific circumstances in the water sector product market competition, i.e. competition by common carriage is not expected to be very intensive. The connection of networks could alternatively be used for cross boarder trade between neighboured water utilities. We show that competition by common carriage leads to production incentives for the inefficient supplier. This implies that the retail prices tend to be lower than with cross border trade. However, the efficiency effect dominates and resulting welfare is higher in case of trade.

Keywords: Water; Networks; Product-Market Competition; Trade; Bargaining (search for similar items in EconPapers)
JEL-codes: D21 L43 L95 Q25 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2004-12-21
New Economics Papers: this item is included in nep-com, nep-env and nep-res
Note: Type of Document - pdf; pages: 39
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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https://econwpa.ub.uni-muenchen.de/econ-wp/pe/papers/0412/0412012.pdf (application/pdf)

Related works:
Journal Article: Enhancing the Efficiency of Water Supply—Product Market Competition Versus Trade (2012)
Working Paper: Enhancing the Efficiency of Water Supply ? Product Market Competition versus Trade (2011)
Working Paper: Enhancing the Efficiency of Water Supply: Product Market Competition versus Trade (2011)
Working Paper: Enhancing Efficiency of Water Supply - Product Market Compoetition versus Trade (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwppe:0412012

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