How "Natural" Are Natural Monopolies in the Water Supply and Sewerage Sector ? [electronic resource] : Case Studies From Developing and Transition Economies / Nauges, Celine

By: Nauges, CelineContributor(s): Nauges, Celine | van den Berg, CarolineMaterial type: TextTextPublication details: Washington, D.C., The World Bank, 2007Description: 1 online resource (38 p.)Subject(s): Delivery of Water Supply | Delivery of Water Supply Services | Economic Theory and Research | Industry | Local Communities | Macroeconomics and Economic Growth | Municipal Water | Municipal Water Supply | Providing Water Supply | Sanitation Services | Service Delivery | Sewerage Services | Town Water Supply and Sanitation | Urban Water | Urban Water Supply and Sanitation | Urban Water Utilities | Utilities | Wastewater Sector | Water | Water and Industry | Water Department | Water Industry | Water Resources | Water Supply | Water Supply and Sanitation | Water Supply and Sanitation Governance and Institutions | Water Supply Companies | Water Users | Water UtilitiesAdditional physical formats: Nauges, Celine.: How "Natural" Are Natural Monopolies in the Water Supply and Sewerage Sector ?Online resources: Click here to access online Abstract: Using data from the International Benchmarking NETwork database, the authors estimate measures of density and scale economies in the water industry in four countries (Brazil, Colombia, Moldova, and Vietnam) that differ substantially in economic development, piped water and sewerage coverage, and characteristics of the utilities operating in the different countries. They find evidence of economies of scale in Colombia, Moldova, and Vietnam, implying the existence of a natural monopoly. In Brazil the authors cannot reject the null hypothesis of constant returns to scale. They also find evidence of economies of customer density in Moldova and Vietnam. The results of this study show that the cost structure of the water and wastewater sector varies significantly between countries and within countries, and over time, which has implications for how to regulate the sector.
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Using data from the International Benchmarking NETwork database, the authors estimate measures of density and scale economies in the water industry in four countries (Brazil, Colombia, Moldova, and Vietnam) that differ substantially in economic development, piped water and sewerage coverage, and characteristics of the utilities operating in the different countries. They find evidence of economies of scale in Colombia, Moldova, and Vietnam, implying the existence of a natural monopoly. In Brazil the authors cannot reject the null hypothesis of constant returns to scale. They also find evidence of economies of customer density in Moldova and Vietnam. The results of this study show that the cost structure of the water and wastewater sector varies significantly between countries and within countries, and over time, which has implications for how to regulate the sector.

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