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Article

Performance Evaluation of Water Services in Italy: A Meta-Frontier Approach Accounting for Regional Heterogeneities

Department of Industrial Engineering, University of Naples Federico II, 80125 Naples, Italy
Academic Editor: Dedi Liu
Water 2022, 14(18), 2882; https://doi.org/10.3390/w14182882
Received: 22 August 2022 / Revised: 11 September 2022 / Accepted: 13 September 2022 / Published: 15 September 2022
(This article belongs to the Section Water Resources Management, Policy and Governance)
Data relative to the water services industry in Italy indicate that there is a serious infrastructure gap between the southern regions and isles and the rest of the country. In these geographical areas, water utilities are provided with substantial public grants from the central and local governments to support investments necessary to mitigate the infrastructure divide by increasing capacity and improve service quality. This paper implements a meta-frontier non-parametric approach based on a data envelopment analysis (DEA) to evaluate the efficiencies of 71 Italian water utilities, accounting for the differentiated contexts in which they operate. A short-term perspective was assumed to estimate efficiency, considering the production factors associated with the infrastructure assets as non-discretionary inputs in the specification of the meta-frontier model. The results showed that water utilities operating in the southern regions and isles suffer from an efficiency gap in comparison to those in the northern and central regions. The average efficiency gap was 9.7%, achieving 24.9% in the worst case. Moreover, a more in-depth analysis focusing on the water utilities in the southern regions and isles indicated that scale inefficiencies might be an important determinant of such an efficiency gap. Indeed, slightly more than 69% of the water utilities operated at increasing returns to scale. Evidence from this study raises concern about the appropriate structure of the Italian water service industry and, particularly, the optimal size of the utilities and the financial sustainability of water services in the southern regions and isles. View Full-Text
Keywords: water service industry; Italy; data envelopment analysis; meta-frontier analysis; efficiency; heterogeneity; short-term; non-discretionary inputs water service industry; Italy; data envelopment analysis; meta-frontier analysis; efficiency; heterogeneity; short-term; non-discretionary inputs
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MDPI and ACS Style

lo Storto, C. Performance Evaluation of Water Services in Italy: A Meta-Frontier Approach Accounting for Regional Heterogeneities. Water 2022, 14, 2882. https://doi.org/10.3390/w14182882

AMA Style

lo Storto C. Performance Evaluation of Water Services in Italy: A Meta-Frontier Approach Accounting for Regional Heterogeneities. Water. 2022; 14(18):2882. https://doi.org/10.3390/w14182882

Chicago/Turabian Style

lo Storto, Corrado. 2022. "Performance Evaluation of Water Services in Italy: A Meta-Frontier Approach Accounting for Regional Heterogeneities" Water 14, no. 18: 2882. https://doi.org/10.3390/w14182882

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