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Andres Picazo-Tadeo (), Francisco Saez-Fernandez and Francisco González-Gómez ()

No 07/04, FEG Working Paper Series from Faculty of Economics and Business (University of Granada)

Abstract: Quality is a dimension of water services that has been repeatedly omitted in the study of performance of water utilities. In this paper, we make use of Data Envelopment Analysis techniques (DEA) to compute both conventional quantity-based and quality-adjusted indicators of technical efficiency for a sample of Spanish water utilities. The key assumptions are that a lack of quality (bad quality) can be regarded as a bad output, and the existence of a trade-off between quantity and quality. Our main results indicate that quality matters in measuring technical performance, the difference between conventional and quality-adjusted evaluations representing the opportunity cost of maintaining quality. Averages and distribution functions significantly differ between both assessments of performance, although water utilities do not seem to rank differently.

Keywords: water utilities; quality; Data Envelopment Analysis. (search for similar items in EconPapers)
JEL-codes: C61 L20 L95 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2007-11-22
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Journal Article: Does service quality matter in measuring the performance of water utilities (2008) Downloads
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