Economies of scale in the water sector: A survey of the empirical literature

Autores
Ferro, Gustavo Adolfo; Lentini, Emilio J.; Mercadier, Augusto C.
Año de publicación
2011
Idioma
inglés
Tipo de recurso
artículo
Estado
versión publicada
Descripción
The issue of the most favorable size and optimal industry structure in the water sector is a relevant topic in many countries, due to fragmentation of the water sector and the key role played by municipalities. Important debates are taking place worldwide about how to provide universal access to the water supply and offer an efficient service. Regarding efficiency, the possibility of exploiting economies of scale would imply better resource allocation, the potential for lower water charges, and greater geographical coverage. By surveying the empirical research from different parts of the world, we aim to shed some light on the topic of economies of scale, and to provide a synthesis of the literature. We also aim to determine whether there is a tradeoff between centralization and decentralization. Our survey shows that, for several countries, variations in efficiency of water provision due to economies of scale do exist. Increases in efficiency related to economies of scale are found for populations in the range of 100,000 to 1 million people served. For larger populations, volume-or density-constant returns to scale are observed, followed by decreasing returns to scale; the reverse occurs for smaller values, suggesting that cost savings are derived from consolidation of providers. Returns to scale refer to changes in output resulting where all inputs increase by a constant factor. If output increases by that same proportional change, then there are constant returns to scale. If output increases by less than that proportional change, there are decreasing returns to scale. If output increases by more than that proportional change, there are increasing returns to scale. Returns to scale is a technological phenomenon, due to the relationship between inputs and outputs in the production function. Economies of scale refer to reductions in unit cost as the scale of production increases. Diseconomies of scale are the opposite: increasing in unit costs as the scale of production increases. Scale changes mean a proportional increase in all factors of production. Economies of scale are a economical phenomenon, due to the relationship between unit costs and the level of production.
Fil: Ferro, Gustavo Adolfo. Universidad Argentina de la Empresa; Argentina. Consejo Nacional de Investigaciones Científicas y Técnicas; Argentina
Fil: Lentini, Emilio J.. Universidad de Buenos Aires; Argentina
Fil: Mercadier, Augusto C.. Universidad Nacional de La Plata; Argentina
Materia
DECENTRALIZATION
ECONOMIES OF SCALE
EFFICIENCY
WATER
Nivel de accesibilidad
acceso abierto
Condiciones de uso
https://creativecommons.org/licenses/by-nc-sa/2.5/ar/
Repositorio
CONICET Digital (CONICET)
Institución
Consejo Nacional de Investigaciones Científicas y Técnicas
OAI Identificador
oai:ri.conicet.gov.ar:11336/193095

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spelling Economies of scale in the water sector: A survey of the empirical literatureFerro, Gustavo AdolfoLentini, Emilio J.Mercadier, Augusto C.DECENTRALIZATIONECONOMIES OF SCALEEFFICIENCYWATERhttps://purl.org/becyt/ford/5.2https://purl.org/becyt/ford/5The issue of the most favorable size and optimal industry structure in the water sector is a relevant topic in many countries, due to fragmentation of the water sector and the key role played by municipalities. Important debates are taking place worldwide about how to provide universal access to the water supply and offer an efficient service. Regarding efficiency, the possibility of exploiting economies of scale would imply better resource allocation, the potential for lower water charges, and greater geographical coverage. By surveying the empirical research from different parts of the world, we aim to shed some light on the topic of economies of scale, and to provide a synthesis of the literature. We also aim to determine whether there is a tradeoff between centralization and decentralization. Our survey shows that, for several countries, variations in efficiency of water provision due to economies of scale do exist. Increases in efficiency related to economies of scale are found for populations in the range of 100,000 to 1 million people served. For larger populations, volume-or density-constant returns to scale are observed, followed by decreasing returns to scale; the reverse occurs for smaller values, suggesting that cost savings are derived from consolidation of providers. Returns to scale refer to changes in output resulting where all inputs increase by a constant factor. If output increases by that same proportional change, then there are constant returns to scale. If output increases by less than that proportional change, there are decreasing returns to scale. If output increases by more than that proportional change, there are increasing returns to scale. Returns to scale is a technological phenomenon, due to the relationship between inputs and outputs in the production function. Economies of scale refer to reductions in unit cost as the scale of production increases. Diseconomies of scale are the opposite: increasing in unit costs as the scale of production increases. Scale changes mean a proportional increase in all factors of production. Economies of scale are a economical phenomenon, due to the relationship between unit costs and the level of production.Fil: Ferro, Gustavo Adolfo. Universidad Argentina de la Empresa; Argentina. Consejo Nacional de Investigaciones Científicas y Técnicas; ArgentinaFil: Lentini, Emilio J.. Universidad de Buenos Aires; ArgentinaFil: Mercadier, Augusto C.. Universidad Nacional de La Plata; ArgentinaIWA Publishing2011-08info:eu-repo/semantics/articleinfo:eu-repo/semantics/publishedVersionhttp://purl.org/coar/resource_type/c_6501info:ar-repo/semantics/articuloapplication/pdfapplication/pdfhttp://hdl.handle.net/11336/193095Ferro, Gustavo Adolfo; Lentini, Emilio J.; Mercadier, Augusto C.; Economies of scale in the water sector: A survey of the empirical literature; IWA Publishing; Journal of Water Sanitation and Hygiene for Development; 1; 3; 8-2011; 179-1932043-9083CONICET DigitalCONICETenginfo:eu-repo/semantics/altIdentifier/url/https://iwaponline.com/washdev/article-abstract/1/3/179/28777/Economies-of-scale-in-the-water-sector-a-survey-of?redirectedFrom=PDFinfo:eu-repo/semantics/altIdentifier/doi/10.2166/washdev.2011.041info:eu-repo/semantics/openAccesshttps://creativecommons.org/licenses/by-nc-sa/2.5/ar/reponame:CONICET Digital (CONICET)instname:Consejo Nacional de Investigaciones Científicas y Técnicas2025-09-29T10:17:53Zoai:ri.conicet.gov.ar:11336/193095instacron:CONICETInstitucionalhttp://ri.conicet.gov.ar/Organismo científico-tecnológicoNo correspondehttp://ri.conicet.gov.ar/oai/requestdasensio@conicet.gov.ar; lcarlino@conicet.gov.arArgentinaNo correspondeNo correspondeNo correspondeopendoar:34982025-09-29 10:17:53.303CONICET Digital (CONICET) - Consejo Nacional de Investigaciones Científicas y Técnicasfalse
dc.title.none.fl_str_mv Economies of scale in the water sector: A survey of the empirical literature
title Economies of scale in the water sector: A survey of the empirical literature
spellingShingle Economies of scale in the water sector: A survey of the empirical literature
Ferro, Gustavo Adolfo
DECENTRALIZATION
ECONOMIES OF SCALE
EFFICIENCY
WATER
title_short Economies of scale in the water sector: A survey of the empirical literature
title_full Economies of scale in the water sector: A survey of the empirical literature
title_fullStr Economies of scale in the water sector: A survey of the empirical literature
title_full_unstemmed Economies of scale in the water sector: A survey of the empirical literature
title_sort Economies of scale in the water sector: A survey of the empirical literature
dc.creator.none.fl_str_mv Ferro, Gustavo Adolfo
Lentini, Emilio J.
Mercadier, Augusto C.
author Ferro, Gustavo Adolfo
author_facet Ferro, Gustavo Adolfo
Lentini, Emilio J.
Mercadier, Augusto C.
author_role author
author2 Lentini, Emilio J.
Mercadier, Augusto C.
author2_role author
author
dc.subject.none.fl_str_mv DECENTRALIZATION
ECONOMIES OF SCALE
EFFICIENCY
WATER
topic DECENTRALIZATION
ECONOMIES OF SCALE
EFFICIENCY
WATER
purl_subject.fl_str_mv https://purl.org/becyt/ford/5.2
https://purl.org/becyt/ford/5
dc.description.none.fl_txt_mv The issue of the most favorable size and optimal industry structure in the water sector is a relevant topic in many countries, due to fragmentation of the water sector and the key role played by municipalities. Important debates are taking place worldwide about how to provide universal access to the water supply and offer an efficient service. Regarding efficiency, the possibility of exploiting economies of scale would imply better resource allocation, the potential for lower water charges, and greater geographical coverage. By surveying the empirical research from different parts of the world, we aim to shed some light on the topic of economies of scale, and to provide a synthesis of the literature. We also aim to determine whether there is a tradeoff between centralization and decentralization. Our survey shows that, for several countries, variations in efficiency of water provision due to economies of scale do exist. Increases in efficiency related to economies of scale are found for populations in the range of 100,000 to 1 million people served. For larger populations, volume-or density-constant returns to scale are observed, followed by decreasing returns to scale; the reverse occurs for smaller values, suggesting that cost savings are derived from consolidation of providers. Returns to scale refer to changes in output resulting where all inputs increase by a constant factor. If output increases by that same proportional change, then there are constant returns to scale. If output increases by less than that proportional change, there are decreasing returns to scale. If output increases by more than that proportional change, there are increasing returns to scale. Returns to scale is a technological phenomenon, due to the relationship between inputs and outputs in the production function. Economies of scale refer to reductions in unit cost as the scale of production increases. Diseconomies of scale are the opposite: increasing in unit costs as the scale of production increases. Scale changes mean a proportional increase in all factors of production. Economies of scale are a economical phenomenon, due to the relationship between unit costs and the level of production.
Fil: Ferro, Gustavo Adolfo. Universidad Argentina de la Empresa; Argentina. Consejo Nacional de Investigaciones Científicas y Técnicas; Argentina
Fil: Lentini, Emilio J.. Universidad de Buenos Aires; Argentina
Fil: Mercadier, Augusto C.. Universidad Nacional de La Plata; Argentina
description The issue of the most favorable size and optimal industry structure in the water sector is a relevant topic in many countries, due to fragmentation of the water sector and the key role played by municipalities. Important debates are taking place worldwide about how to provide universal access to the water supply and offer an efficient service. Regarding efficiency, the possibility of exploiting economies of scale would imply better resource allocation, the potential for lower water charges, and greater geographical coverage. By surveying the empirical research from different parts of the world, we aim to shed some light on the topic of economies of scale, and to provide a synthesis of the literature. We also aim to determine whether there is a tradeoff between centralization and decentralization. Our survey shows that, for several countries, variations in efficiency of water provision due to economies of scale do exist. Increases in efficiency related to economies of scale are found for populations in the range of 100,000 to 1 million people served. For larger populations, volume-or density-constant returns to scale are observed, followed by decreasing returns to scale; the reverse occurs for smaller values, suggesting that cost savings are derived from consolidation of providers. Returns to scale refer to changes in output resulting where all inputs increase by a constant factor. If output increases by that same proportional change, then there are constant returns to scale. If output increases by less than that proportional change, there are decreasing returns to scale. If output increases by more than that proportional change, there are increasing returns to scale. Returns to scale is a technological phenomenon, due to the relationship between inputs and outputs in the production function. Economies of scale refer to reductions in unit cost as the scale of production increases. Diseconomies of scale are the opposite: increasing in unit costs as the scale of production increases. Scale changes mean a proportional increase in all factors of production. Economies of scale are a economical phenomenon, due to the relationship between unit costs and the level of production.
publishDate 2011
dc.date.none.fl_str_mv 2011-08
dc.type.none.fl_str_mv info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
http://purl.org/coar/resource_type/c_6501
info:ar-repo/semantics/articulo
format article
status_str publishedVersion
dc.identifier.none.fl_str_mv http://hdl.handle.net/11336/193095
Ferro, Gustavo Adolfo; Lentini, Emilio J.; Mercadier, Augusto C.; Economies of scale in the water sector: A survey of the empirical literature; IWA Publishing; Journal of Water Sanitation and Hygiene for Development; 1; 3; 8-2011; 179-193
2043-9083
CONICET Digital
CONICET
url http://hdl.handle.net/11336/193095
identifier_str_mv Ferro, Gustavo Adolfo; Lentini, Emilio J.; Mercadier, Augusto C.; Economies of scale in the water sector: A survey of the empirical literature; IWA Publishing; Journal of Water Sanitation and Hygiene for Development; 1; 3; 8-2011; 179-193
2043-9083
CONICET Digital
CONICET
dc.language.none.fl_str_mv eng
language eng
dc.relation.none.fl_str_mv info:eu-repo/semantics/altIdentifier/url/https://iwaponline.com/washdev/article-abstract/1/3/179/28777/Economies-of-scale-in-the-water-sector-a-survey-of?redirectedFrom=PDF
info:eu-repo/semantics/altIdentifier/doi/10.2166/washdev.2011.041
dc.rights.none.fl_str_mv info:eu-repo/semantics/openAccess
https://creativecommons.org/licenses/by-nc-sa/2.5/ar/
eu_rights_str_mv openAccess
rights_invalid_str_mv https://creativecommons.org/licenses/by-nc-sa/2.5/ar/
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application/pdf
dc.publisher.none.fl_str_mv IWA Publishing
publisher.none.fl_str_mv IWA Publishing
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