Capturing the environment, a metafrontier approach to the drinking water sector

Kristof De Witte and Rc Marques ()

Working Papers of Department of Economics, Leuven from KU Leuven, Faculty of Economics and Business (FEB), Department of Economics, Leuven

Abstract: Environmental factors add complexity to the comparison between specific activities or entire entities. Decision making units with an inferior performance are tempted to invoke that their organization is different from the others in the data set. By reinterpreting and extending the metafrontier literature, we propose an all-embracing concept to fully capture the operational environment. We suggest the ‘Group Specific Technical Efficiency’ as a new measure to assess the overall efficiency of a utility while allowing for environmental differences. A real-world example of drinking water utilies out of 5 different countries illustrates the concept.

Keywords: Free Disposal Hull; Efficiency Measurement; Environmental Variables; Metafrontier; Water Industry (search for similar items in EconPapers)
JEL-codes: C14 C61 D24 L95 (search for similar items in EconPapers)
Date: 2008-03
New Economics Papers: this item is included in nep-eff and nep-env
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:ete:ceswps:ces0804

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