Cost Efficiency and Scale Economies of Japanese Water Utilities

Theara Horn and Hitoshi Saito ()

No 11-19, Discussion Papers in Economics and Business from Osaka University, Graduate School of Economics

Abstract: With the data of 831 Japanese water utilities from 1999 to 2008, we used the stochastic cost frontier analysis with a true fixed-effect model in order to estimate the cost efficiency and scale economies. We found that cost inefficiency was approximately 37%. The economies of water delivery volume were observed and found to be remarkably higher for small water utilities than for large ones. Scale economies were also discovered in small water utilities; however, scale diseconomies are likely to be incurred in larger water utilities. The optimal supply population size of a water utility is estimated to be 85,658 consumers, with a water delivery volume of 15.7 million m3 and a network length of 522 km.

Keywords: Cost Efficiency; Scale Economies; Optimal Size; Japanese Water Utilities (search for similar items in EconPapers)
JEL-codes: H11 L38 L95 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2011-05
New Economics Papers: this item is included in nep-agr and nep-eff
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www2.econ.osaka-u.ac.jp/library/global/dp/1119.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:osk:wpaper:1119

Access Statistics for this paper

More papers in Discussion Papers in Economics and Business from Osaka University, Graduate School of Economics Contact information at EDIRC.
Bibliographic data for series maintained by The Economic Society of Osaka University ().