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Water 2015, 7(7), 3263-3282; doi:10.3390/w7073263

The Effects of Operational and Environmental Variables on Efficiency of Danish Water and Wastewater Utilities

1
Department of Management, University of Verona, Via dell'Artigliere 19, Verona 37129, Italy
2
Department of Economics and Management, Via C. Ridolfi 10, Pisa 56124, Italy
*
Author to whom correspondence should be addressed.
Academic Editor: Y. Jun Xu
Received: 19 January 2015 / Revised: 5 June 2015 / Accepted: 8 June 2015 / Published: 26 June 2015
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Abstract

Efficiency improvement is one of three patterns a public utility should follow in order to get funds for investments realization. The other two are recourse to bank loans or to private equity and tariff increase. Efficiency can be improved, for example, by growth and vertical integration and may be conditioned by environmental variables, such as customer and output density. Prior studies into the effects of these variables on the efficiency of water utilities do not agree on certain points (e.g., scale and economies of scope) and rarely consider others (e.g., density economies). This article aims to contribute to the literature by analysing the efficiency of water utilities in Denmark, observing the effects of operational and environmental variables. The method is based on two-stage Data Envelopment Analysis (DEA) applied to 101 water utilities. We found that the efficiency of the water sector was not affected by the observed variables, whereas that of wastewater was improved by smaller firm size, vertical integration strategy, and higher population density. View Full-Text
Keywords: scale of firms; scope of operations; customer density scale of firms; scope of operations; customer density
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).

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MDPI and ACS Style

Guerrini, A.; Romano, G.; Leardini, C.; Martini, M. The Effects of Operational and Environmental Variables on Efficiency of Danish Water and Wastewater Utilities. Water 2015, 7, 3263-3282.

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