Dynamic Efficiency in the English and Welsh Water and Sewerage Industry

Charlotte Pointon () and Kent Matthews

No E2014/2, Cardiff Economics Working Papers from Cardiff University, Cardiff Business School, Economics Section

Abstract: The English and Welsh water and sewerage industry is characterised by indivisible capital which has a long service life. Previous studies of efficiency for the English and Welsh water and sewerage industry take a static framework, assuming all inputs can be adjusted instantaneously. This paper measures dynamic efficiency by incorporating intertemporal links of capital within the production function for the English and Welsh water and sewerage industry for the period 1997 2011. Dynamic Data Envelopment Analysis (DEA) considers capital as a quasi-fixed input and is modelled as a contemporaneous output into current production and an input from past production. The results show that the inadequate intertemporal allocation of quasi-fixed inputs is the largest contributor of inefficiency.

Keywords: Dynamic efficiency; water and sewage industry; DEA; intertemporal allocation (search for similar items in EconPapers)
JEL-codes: D24 L23 L31 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2014-04, Revised 2014-11
New Economics Papers: this item is included in nep-eff
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Citations: View citations in EconPapers (5)

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Related works:
Journal Article: Dynamic efficiency in the English and Welsh water and sewerage industry (2016)
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