Profit productivity change in the English and Welsh water sector: Impact of the price reviews

Manuel Mocholi-Arce, Ramon Sala-Garrido, Maria Molinos-Senante and Alexandros Maziotis

Utilities Policy, 2023, vol. 82, issue C

Abstract: Profitability and productivity change over time are two key indicators to evaluate the performance of water companies. In this study, the profit inefficiency of water utilities was estimated based on the Luenberger Productivity Indicator (LPI). The empirical approach focused on the English and Welsh water industry from 2001 to 2018. It was illustrated that water companies suffered a profit inefficiency effect of 50%, mainly (44%) attributed to allocation inefficiency, whereas technical inefficiency contributed by 6%. Estimated profit LPI values revealed the impact of the price reviews on the profit productivity of the English and Welsh water companies.

Keywords: Profit efficiency; Productivity change; Water utilities (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:juipol:v:82:y:2023:i:c:s0957178723000565

DOI: 10.1016/j.jup.2023.101544

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