Does Intermunicipal Cooperation Affect Prices? An Economic Analysis of the French Drinking Water Sector

Mehdi Guelmamen ()
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Mehdi Guelmamen: BETA - Bureau d'Économie Théorique et Appliquée - AgroParisTech - UNISTRA - Université de Strasbourg - Université de Haute-Alsace (UHA) - Université de Haute-Alsace (UHA) Mulhouse - Colmar - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement

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Abstract: The provision of drinking water has become a central concern for public authorities due to climate change, which has prompted policymakers to reevaluate their approaches to this semi-renewable resource. In this paper, we assess the effect of inter-municipal cooperation on performance. Using a comprehensive panel dataset that comprises all French drinking water providers from 2008 to 2021, we show that organizational forms that are chosen by municipalities influence the prices of drinking water that are paid by consumers: Our empirical findings reveal a selection bias in the estimation of price equations, and we show that consumer prices are significantly higher on average when municipalities decide to cooperate among themselves. Inter-municipal cooperation does not necessarily lead to better performance in the provision of drinking water.

Keywords: Intermunicipal cooperation; Local government; Public services; Drinking water prices; Selection bias (search for similar items in EconPapers)
Date: 2025-01-17
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Published in Review of Industrial Organization, 2025, ⟨10.1007/s11151-025-10008-2⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05014630

DOI: 10.1007/s11151-025-10008-2

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