Estimation of the Return on Capital in Municipal Water Systems

Donald Vitaliano

National Tax Journal, 2005, vol. 58, issue 4, 685-96

Abstract: Seventy–five small, municipal water systems are analyzed to determine if they employ the least–cost long–run capital stock, and if they minimize cost given the observed level of capital. The social cost of capital exceeds the estimated return on investment by more than four times, and actual production costs are 36 percent above minimum costs. Median capital stock inefficiency, due to overinvestment, is $70,500 per system, and median cost inefficiency is $24,300. Extrapolated to the seven thousand similar systems nationwide, the combined cost of these two types of inefficiency is $663.6 million per year.

Date: 2005
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://doi.org/10.17310/ntj.2005.4.04 (application/pdf)
https://doi.org/10.17310/ntj.2005.4.04 (text/html)
Access is restricted to subscribers and members of the National Tax Association.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ntj:journl:v:58:y:2005:i:4:p:685-96

Access Statistics for this article

National Tax Journal is currently edited by Stacy Dickert-Conlin and William M. Gentry

More articles in National Tax Journal from National Tax Association, National Tax Journal Contact information at EDIRC.
Bibliographic data for series maintained by The University of Chicago Press ().