Allocative efficiency of rural water supply – a globally flexible SGM cost frontier

Johannes Sauer and Klaus Frohberg

Journal of Productivity Analysis, 2007, vol. 27, issue 1, 40 pages

Abstract: This contribution investigates the efficiency of water suppliers in rural areas of East and West Germany. A non-radial measure of input specific allocative inefficiency is used to reduce the distributional dependency with respect to the inefficiency parameters. It is based on the demand system of a flexible cost function for the variable inputs labour, energy and chemicals modelled by applying a modified symmetric generalized McFadden functional form. Concavity restrictions, as required by economic theory, are imposed. The analysis reveals that efforts towards increasing suppliers’ allocative efficiency should focus on the relatively inefficient usage of the input chemicals. The input specific allocative model specification was found to be superior to the overall allocative specification. Copyright Springer Science+Business Media, LLC 2007

Keywords: Functional form; Input specific allocative efficiency; Symmetric generalized McFadden; Rural water supply; C31; D24; Q25 (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (21)

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Persistent link: https://EconPapers.repec.org/RePEc:kap:jproda:v:27:y:2007:i:1:p:31-40

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DOI: 10.1007/s11123-006-0024-4

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