Does Intermunicipal Cooperation Affect Prices? An Economic Analysis of the French Drinking Water Sector

Mehdi Guelmamen

Working Papers of BETA from Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg

Abstract: The provision of drinking water has become a central concern for public authorities due to climate change, prompting policymakers to reevaluate their approach to this semi-renewable resource. In this paper, we assess the effect of inter-municipal cooperation on performance. Using a comprehensive panel dataset comprising all French drinking water providers from 2008 to 2021, we show that organizational forms chosen by municipalities have an effect on prices of drinking water paid by consumers. More precisely, our empirical findings reveal a selection bias in the estimation of price equations and we show that consumer prices are significantly higher on average when municipalities decide to cooperate. Inter-municipal cooperation does not necessarily lead to better performance in the provision of drinking water.

Keywords: Intermunicipal cooperation; local government; public services; drinking water prices; selection bias. (search for similar items in EconPapers)
JEL-codes: H11 H77 L11 L95 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:ulp:sbbeta:2024-40

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