Techno-economic Efficiency of Water Utilities: a Peer-Evaluation Estimation

Manuel Mocholi-Arce, Ramon Sala-Garrido, Alexandros Maziotis and Maria Molinos-Senante ()
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Manuel Mocholi-Arce: University of Valencia
Ramon Sala-Garrido: University of Valencia
Alexandros Maziotis: Pontificia Universidad Católica de Chile
Maria Molinos-Senante: University of Valladolid

Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), 2025, vol. 39, issue 8, No 6, 3715-3728

Abstract: Abstract Water utilities provide water and sanitation services in monopolistic conditions. Hence, assessing their performance through benchmarking is crucial for proper regulation. This research addresses the limitations of self-evaluation Data Envelopment Analysis (DEA) models commonly used for benchmarking water utilities’ efficiency. Given that these models often lead to overestimated efficiency scores, our study introduces a cross-efficiency analysis framework integrating both self and peer-evaluation perspectives. This innovative approach, applied to a representative sample of Chilean water utilities, uniquely considers unplanned water supply interruptions and sewerage blockages as undesirable outputs, emphasizing service continuity. Average techno-economic efficiency scores based on self-evaluation, and peer-evaluation were 0.681 and 0.388, respectively. Hence, significant techno-economic efficiency overestimations in self-evaluation scores are evident, with implications for regulatory challenges and potential service quality compromises. The data also highlights a considerable opportunity for improvement in water and sanitation continuity in Chilean water utilities. The findings not only shine a spotlight on the inherent biases of prevalent benchmarking techniques but also highlight a substantial avenue for bolstering water and sanitation service continuity within water utilities.

Keywords: Techno-economic efficiency; Water utilities; Quality of service; Continuity; Data envelopment analysis; Cross-efficiency (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s11269-025-04126-5

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