Abstract
| Original language | English |
|---|---|
| Pages (from-to) | 219-242 |
| Number of pages | 24 |
| Journal | Journal of Regulatory Economics |
| Volume | 37 |
| Issue number | 3 |
| DOIs | |
| Publication status | Published - Jun 2010 |
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Bibliographical note
Creative Commons Attribution (CC BY)Keywords
- regulation
- drinking water utilities
- profit decomposition
- data envelopment analysis
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Is a little sunshine all we need? On the impact of sunshine regulation on profits, productivity and prices in the Dutch drinking water sector. / De Witte, Kristof; Saal, David S.
In: Journal of Regulatory Economics, Vol. 37, No. 3, 06.2010, p. 219-242.Research output: Contribution to journal › Article
TY - JOUR
T1 - Is a little sunshine all we need? On the impact of sunshine regulation on profits, productivity and prices in the Dutch drinking water sector
AU - De Witte, Kristof
AU - Saal, David S.
N1 - Creative Commons Attribution (CC BY)
PY - 2010/6
Y1 - 2010/6
N2 - This paper analyzes the performance of Dutch drinking water utilities before and after the introduction of sunshine regulation, which involves publication of the performance of utilities but no formal price regulation. By decomposing profit change into its economic drivers, our results suggest that, in the Dutch political and institutional context, sunshine regulation was effective in improving the productivity of publicly organised services. Nevertheless, while sunshine regulation did bring about a moderate reduction in water prices, sustained and substantial economic profits suggest that it may not have the potential to fully align output prices with economic costs in the long run. In methodological terms, the DEA based profit decomposition is extended to robust and conditional non-parametric efficiency measures, so as to account better for both uncertainty and differences in operating environment between utilities.
AB - This paper analyzes the performance of Dutch drinking water utilities before and after the introduction of sunshine regulation, which involves publication of the performance of utilities but no formal price regulation. By decomposing profit change into its economic drivers, our results suggest that, in the Dutch political and institutional context, sunshine regulation was effective in improving the productivity of publicly organised services. Nevertheless, while sunshine regulation did bring about a moderate reduction in water prices, sustained and substantial economic profits suggest that it may not have the potential to fully align output prices with economic costs in the long run. In methodological terms, the DEA based profit decomposition is extended to robust and conditional non-parametric efficiency measures, so as to account better for both uncertainty and differences in operating environment between utilities.
KW - regulation
KW - drinking water utilities
KW - profit decomposition
KW - data envelopment analysis
UR - http://www.scopus.com/inward/record.url?scp=77952288715&partnerID=8YFLogxK
U2 - 10.1007/s11149-009-9112-5
DO - 10.1007/s11149-009-9112-5
M3 - Article
VL - 37
SP - 219
EP - 242
JO - Journal of Regulatory Economics
JF - Journal of Regulatory Economics
SN - 0922-680X
IS - 3
ER -