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DOES PRIVATE MANAGEMENT OF WATER SUPPLY SERVICES REALLY INCREASE PRICES? AN EMPIRICAL ANALYSIS

Roberto Martinez-Espineira (), María García-Valiñas () and Francisco González-Gómez ()

No 07/05, FEG Working Paper Series from Faculty of Economics and Business (University of Granada)

Abstract: In this paper we try to explain differences in the average price of domestic water supply services in Spain, paying special attention to the effects of privatisation of the service on price levels. We base our empirical analysis on the application of a `treatment effects' model on a sample of 53 major urban municipalities. This model accounts for the fact that municipalities do not randomly assign themselves between a group using strictly public ownership and management and a group where all or part of the service has been delegated to a private firm. We find that, once this endogeneity is taken into account, there seems to be a positive and significant effect of privatisation on water price levels.

Keywords: Urban water services; privatization; water prices (search for similar items in EconPapers)
JEL-codes: C21 L33 L95 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2007-11-22
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