Williams, S., Pickard, C., Glass, K. et al. (1 more author) (2020) Benchmarking water retail cost efficiency in England and Wales. International Journal of the Economics of Business, 27 (3). pp. 431-467. ISSN 1357-1516
Abstract
Privatised water companies in England and Wales are subject to economic regulation by the industry regulator (Ofwat). Ofwat sets 5-year caps on the prices companies can charge their customers. These caps are in part based on the benchmarking of companies’ costs. Ofwat has not previously used econometrics to benchmark domestic retail costs, but it undertook such modelling in its 2019 price review analysis. This is the first journal article to present an efficiency analysis of domestic water retail costs in England and Wales. Our approach is different from Ofwat’s, as we propose two new ways of accounting for differences in the effect on cost of the number of single and dual service customers (water / sewerage-only and water and sewerage). Some companies’ cost efficiencies vary greatly between the two ways. Depending on the approach to price capping, this could possibly have non-negligible implications for companies’ caps.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © 2020 Informa UK Limited, trading as Taylor & Francis Group. This is an author-produced version of a paper subsequently published in International Journal of the Economics of Business. Uploaded in accordance with the publisher's self-archiving policy. |
Keywords: | Periodic price caps; frontier models; single service (water/sewerage-only) customers; dual service (water and sewerage) customers; bad debt costs |
Dates: |
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Institution: | The University of Sheffield |
Academic Units: | The University of Sheffield > Faculty of Social Sciences (Sheffield) > Management School (Sheffield) |
Depositing User: | Symplectic Sheffield |
Date Deposited: | 01 Jul 2020 06:59 |
Last Modified: | 21 Jan 2022 01:38 |
Status: | Published |
Publisher: | Taylor & Francis |
Refereed: | Yes |
Identification Number: | 10.1080/13571516.2020.1790979 |
Related URLs: | |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:162608 |