Abstract

The paper quantifies the relative efficiency of the ten privatized water and sewerage companies between 1987 and 1997. A one-component fixed-effects panel data model is used to estimate a cost function from which distribution-free firm-specific estimates of operational cost efficiency are derived. The study differs from previous studies through the use of differing econometric techniques and by considering the water and sewerage companies as integrated firms. Overall, a moderate level of dispersion in operational cost efficiency is recorded.