Measuring the productivity growth of Malaysia's water sector: Implications for regulatory reform

We apply the bootstrap Malmquist-Luenberger productivity index (MLPI) to measure the total factor productivity (TFP) growth for 14 water operators in Malaysia during the years 2000–2017. The analysis confirms that Malaysia's water sector experienced a deterioration in average productivity of 1.21% per year, attributed mainly to technological regression. Before the regulatory reform, the average productivity of water operators improved and was positively influenced by efficiency change. After the reform, the water operators suffered a decline in TFP growth due to decreased efficiency and technical change. The inefficient utilization of capital expenditure and aging water infrastructure are possible reasons for this effect. Regulatory reform is necessary but insufficient to improve the productivity growth of Malaysia's water sector.     

Estimation and evaluation of productivity change and its drivers in the English and Welsh water sector: a stochastic cost frontier approach

ABSTRACT

Estimating productivity change and its determinants is of great importance when measuring the performance of a firm. A true random effect cost model was employed to measure the cost efficiency of water companies in England and Wales from 1993 to 2016. Subsequently, total factor productivity change was estimated and decomposed into cost-efficiency change, technical change, scale efficiency change, output effect and residual price effect. The results indicate that the English and Welsh water industry increased its productivity over the period examined at a rate of about 2.1%, and it was influenced primarily by technical change. The price reviews appear to have a positive impact on the productivity of water-only companies during the whole period examined. In the case of water and sewerage companies, the 1994 and 1999 price reviews had a positive impact on productivity, whereas the last two price reviews had an adverse impact.     

Profit productivity change in the English and Welsh water sector: Impact of the price reviews

Profitability and productivity change over time are two key indicators to evaluate the performance of water companies. In this study, the profit inefficiency of water utilities was estimated based on the Luenberger Productivity Indicator (LPI). The empirical approach focused on the English and Welsh water industry from 2001 to 2018. It was illustrated that water companies suffered a profit inefficiency effect of 50%, mainly (44%) attributed to allocation inefficiency, whereas technical inefficiency contributed by 6%. Estimated profit LPI values revealed the impact of the price reviews on the profit productivity of the English and Welsh water companies.     

Efficiency and productivity of renewable energy technologies: Evidence from U.S. investor-owned utilities across regional markets

This study employs a Data Envelopment Analysis (DEA) modeling technique to investigate the efficiency and productivity of renewable energy (RE) adoption across technologically diverse electricity-generating utilities. By employing metrics capturing policy effects, the study evaluates the RE adoption efficiency and productivity using a dynamic DEA model and the Malmquist DEA technique. First, the findings reveal that RE adoption is not significantly different across regional electricity markets. Second, the study revealed that RE adoption increased over the last three years. The total mean productivity change over the entire study period showed a mean improvement of 4.8%.     

Performance of the Tunisian Water Utility: An input-distance function approach

The main objective of this paper is to analyse the performance pattern in the Tunisian drinking water industry. The industry is a state monopoly, administered by the Tunisian Water Utility (TWU) since 1968. We apply the stochastic distance frontier method to TWU data over a period of 11 years, from 1999 to 2009. This approach is used to estimate water production technology, to measure technical efficiency levels and total factor productivity growth, and to investigate the factors influencing efficiency levels and those driving productivity growth. The results suggest that performance-based regulation can improve efficiency and enhance productivity in the Tunisian water industry.     

Sources of efficiency gains in port reform: a DEA decomposition of a Malmquist TFP index for Mexico

Mexico’s port system was centrally managed by public firms until 1993 reforms liberalized and decentralized it to regional port authorities to improve its efficiency. This paper measures the changes in, and sources of, efficiency since the reforms. We rely on a Malmquist index to calculate and decompose changes in productivity, in terms of infrastructure, for Mexico’s 11 main ports between 1996 and 1999. The results suggest that total factor productivity in Mexican ports rose by an average of 4.1% a year in 1996–1999. They also suggest the fourth year, because some ports saw their scale efficiency deteriorate as a result of the effects of the East Asia crisis. We finally show that with one exception, all the ports maintained or improved their pure technical efficiency during the sample period. We conclude by arguing that these types of results could be used by any port regulator to improve the effectiveness and fairness of its regulatory decisions.     

Risk of sick leave associated with outdoor air supply rate, humidification, and occupant complaints

We analyzed 1994 sick leave for 3,720 hourly employees of a large Massachusetts manufacturer, in 40 buildings with 115 independently ventilated work areas. Corporate records identified building characteristics and IEQ complaints. We rated ventilation as moderate (approximately 25 cfm/person, 12 ls-1) or high (approximately 50 cfm/person, 24 ls-1) outdoor air supply based on knowledge of ventilation systems and CO2 measurements on a subset of work areas, and used Poisson regression to analyze sick leave controlled for age, gender, seniority, hours of non-illness absence, shift, ethnicity, crowding, and type of job (office, technical, or manufacturing worker). We found consistent associations of increased sick leave with lower levels of outdoor air supply and IEQ complaints. Among office workers, the relative risk for short-term sick leave was 1.53 (95% confidence 1.22-1.92) with lower ventilation, and 1.52 (1.18-1.97) in areas with IEQ complaints. The effect of ventilation was independent of IEQ complaints and among those exposed to lower outdoor air supply rates the attributable risk of short-term sick leave was 35%. The cost of sick leave attributable to ventilation at current recommended rates was estimated as $480 per employee per year at Polaroid. These findings suggest that net savings of $400 per employee per year may be obtained with increased ventilation. Thus, currently recommended levels of outdoor air supply may be associated with significant morbidity, and lost productivity on a national scale could be as much as $22.8 billion per year. Additional studies of IEQ impacts on productivity and sick leave, and the mechanisms underlying the apparent association are needed.     

Service quality,technical efficiency and total factor productivity growth in Pakistan's post-reform electricity distribution companies

Pakistan's energy sector has undergone substantial reforms during the last three decades with the aim to improve its operational performance and to cater to the growing energy needs of the economy. In the wake of these reforms, the WAPDA Act was passed in 1998 to achieve operational and financial efficiencies. Pakistan's electricity market is still hampered by issues like extended blackouts, electricity thefts, high circular debt and poor service quality. The electricity distribution sector is thus an interesting case to investigate its efficiency in the post-reform period by examining the impact of service-quality parameters (SQPs), which have generally been neglected in the literature. Stochastic frontier analysis has been used to estimate technical efficiency, while the Malmquist Productivity Index is implemented to decompose total factor productivity (TFP) into scale change, technical change and efficiency change from 2006 to 2016. We conclude that the technical efficiency score declines from 98 percent to 36 percent with the inclusion of SQPs in the models. The results also indicate a negative trend in scale change, implying that distribution companies are not operating at the technically optimal scale. We propose that the regulatory body should change its governance regime and focus on incentive-based regulation instead of rate-of-return regulation.     

Does non-revenue water affect Malaysia's water services industry productivity?

This study examines the total factor productivity (TFP) changes in the Malaysian water services industry from 1999 to 2012 using a global Malmquist Luenberger index method incorporating an undesirable output, namely non-revenue water. The results show that the Malaysian water services industry experienced a declining TFP of 0.72 percent per year, with technology regression being the primary cause of the annual TFP decrease. Several initiatives are suggested to reduce non-revenue water in Malaysia. The findings provide useful insights that can be incorporated into future reforms of the industry.     

Paths to universalize water and sewage services in Brazil: The role of regulatory authorities in promoting efficient service

The 2007 institution of a regulatory framework established ways to overcome deficits in Brazil's sanitation services, including economic efficiency. This study analyzes the performance of regulatory authorities in promoting the efficiency of water and sewage service providers in Brazil. The study was developed in three stages: analysis of efficiency with Data Envelopment Analysis (DEA) for 2006 and 2011; assessment of productivity using the Malmquist Index (MI); and document analysis of regulatory standards. Among the results, significant inefficiencies were detected and the mean for pure technical efficiency was higher among unregulated providers both for 2006 and in 2011. The MI showed gains in productivity from 2006 to 2011. The decomposed analysis of the index indicated a shift in the efficiency frontier to a higher level, but with a decrease in the providers' pure efficiency. From the analysis of the regulatory activity, we identified regulators that had not issued regulatory standards related to the promotion of allocative or productive efficiency. Analysis of the results shows that the regulatory performance has not ensured that providers achieve better performance.     

基于DEA-Malmquist 的中国建筑业大型承包商全要素生产率分析

采用基于DEA 的Malmquist 生产率指数测算了2007~2011 年中国29 家2012 年上市的大型承包商的全要素生产效率,发现TFP 年平均增长率出现了负增长率-3.2%,总体趋势先升后降。说明29 家承包商5 年来的生产率总体上并没有得到提升,可知这些承包商在上市前后的效益增长并没有通过集约型的生产率增长实现,主要依赖粗放型规模扩张实现;生产率提升并没有依靠技术进步而主要依赖技术效率的提升。最后对技术进步和技术效率的变化进行了分析,并给出了针对性的建议     

Impact of external costs of unplanned supply interruptions on water company efficiency: Evidence from Chile

Conventional performance assessments of water companies ignore the external costs due to water supply outages. To overcome this gap, we evaluate the impact of external costs of unplanned supply interruptions on the efficiency of water companies. Two efficiency metrics, internal technical efficiency (ITE), and total technical efficiency (TTE), were estimated based on data envelopment analysis (DEA). The results evidence that the external costs of unplanned water supply interruptions impact, on average, 7.9% of the efficiency of water companies. We also explored the impact of a set of environmental variables on water company efficiency.     

Evaluation of residential rainfall harvesting systems in Jordan

A field study was conducted to evaluate the potential of rooftop rainfall harvesting (RRH), determine the smallest tank volume and the potential contribution of RRH to the national water budget. The potential water volume from rooftops nationwide is 14.7 million cubic metres per year (MCM/year), which comprises 6% of the domestic national water budget. Public water supply rates decreased for areas practicing RRH. The number of underground tank (cisterns) increased in high rainfall areas indicating adaptation behaviours for securing water. Smallest cistern volume charts were constructed for each governorate in relation to consumption rate and rooftop area. An immediate and nationwide awareness and legislative programmes are needed to spread RRH among the whole population of Jordan.     

Assessing productivity changes in water companies: a comparison of the Luenberger and Luenberger-Hicks-Moorsteen productivity indicators

ABSTRACT

Interest in evaluating productivity changes in water companies has increased in recent years. In this paper, for the first time, we employ the Luenberger-Hicks-Moorsteen Productivity Indicator (LHMPI) to evaluate productivity changes in a sample of Chilean water companies from 2010 to 2016. Productivity change estimations obtained by both the Luenberger Productivity Indicator (LPI) and the LHMPI are compared. Moreover, both indicators were computed assuming constant and variable returns to scale technologies. The LHMPI estimates illustrate that productivity in Chilean water companies has slightly improved over the period studied due to the positive trend of outputs, whereas the inputs negatively contributed to productivity changes. Results from the empirical analysis enabled us to verify that the LHMPI and LPI (and their drivers) are statistically different. This conclusion illustrates that water regulators need to pay attention to the indicators used when assessing productivity changes in water companies.     

Water sector resilience in the United Kingdom and Ireland: The COVID-19 challenge

The outbreak of COVID-19 led to restrictions on movements and activities, which presented a serious challenge to the resilience of the water sector. It is essential to understand how successfully water companies responded to this unprecedented event so effective plans can be built for future disruptive events. This study aimed to evaluate how the water sectors in the UK and Ireland were affected from a holistic sustainability and resilience-based perspective. Using pre-COVID data for 18 indicators of company performance and comparing them to the first year of the pandemic, the direction and magnitudes of change varied across companies. Financial indicators were significantly negatively affected, with interest cover ratio, post-tax return on regulated equity, and operating profit, exhibiting the greatest average declines of 21%, 21%, and 18%, respectively, a trend that would be dangerous to provisions and company operations if continued. Despite this, service and environmental indicators improved during the first year of the pandemic, exemplified by unplanned outage, risk of sewer storm flooding, and water quality compliance risk decreasing by a mean average of 37%, 32%, and 27%, respectively. Analysis using the Hicks-Moorsteen Productivity Index concluded that average productivity increased by 35%. The results suggest that the water sector was relatively resilient to the COVID-19 pandemic in terms of services, but adverse effects may have manifested in a deteriorated financial position that could exacerbate future challenges arising from exogenous pressures such as climate change. Specific advice for the UK water sector is to scrutinize non-critical spending, such as shareholder payments, during periods of economic downturn to ensure essential capital projects can be carried out. Although results are temporal and indicator selection sensitive, we recommend that policy, regulation, and corporate culture embrace frameworks that support long-term resilience to since the relative success in response to COVID-19 does not guarantee future success against differing challenges. This study generates a timely yet tentative insight into the diverse performance of the water sector during the pandemic, pertinent to the water industry, regulators, academia, and the public.     

Productivity growth of wastewater treatment plants – accounting for environmental impacts: a Malmquist-Luenberger index approach

As the number of wastewater treatment plants (WWTPs) has increased, the economic considerations associated with their management have become more relevant. Measuring the productivity of WWTPs allows the best practice to be identified and resource use to be optimized. Previous studies assessing the productivity change of WWTPs have ignored undesirable outputs; thus, wastewater treatment was considered to be free of environmental impacts. To overcome this limitation and for the first time, we assessed the productivity growth of a sample of Spanish WWTPs, while also accounting for the emission of greenhouse gases and sludge production. The Malmquist-Luenberger productivity index (MLPI) and its components, the efficiency and technological changes, were estimated. To explore the role of environmental impacts in the measurement of the productivity growth of WWTPs, the MLPI was contrasted with the conventional measurement of productivity change: namely, the Malmquist productivity index (MPI). The omission of undesirable outputs led to an underestimation of the productivity growth, with statistically significant differences between the MLPI and MPI results. The comparison of the MPI and MLPI illustrated that WWTP operators and water agencies have internalized some good environmental practices into their production process costs.     

Physico‐chemical conditions of water in the river Kshipra (India) to determine fish productivity

River Kshipra is a small river supplying water to surrounding areas of the Ujjain district (India) for domestic and industrial use. This very old river has been of a sacred importance and serves for holy dips on certain auspicious festivals like “Kumbha” etc. The main contamination of this sacred river is through the heavily polluted river Khan which joins it in Ujjain. The water quality of the river shows a considerable change throughout the year and indicates the productivity level of aquatic organisms. The data worked out for DO, COD, BOD dissolved CO₂ and trace elements like Ca and Mg indicate an appreciable fall in productivity during the summer months. This directly refers to decrease in fish production in the river and availability of fish seed during the monsoon period. The studies reveal that the decrease in productivity is mainly due to pollutants brought through sewage and industrial discharge from river Khan which mix with river water.     

Die umweltfaktoren, die die verbreitung und entwicklung von Chalcalburnus tarichi (PALL. 1881) (Pisces: Cyprinidae) in Burdur-See begrenzen

Burdur Lake, an entirely closed and brackish water lake, having an area of 190 km² and 76 m depth, is located in the “Lakes Region” of Anatolia, 4 km from the west of Burdur city.There have been made many attempts to breed an economically important fish population but all attempts were unsuccessful. During 1946–1948 some hydrobiological investigations were carried out. According to these investigations, hydrobiological conditions of the lake were found to be suitable for Chalcalburnus tarichi (PALL. 1881) (Pisces: Cyprinidae), a fish which is endemic to the Lake Van in eastern Anatolia. Since 1966 an attempt has been made to breed Chalcalburnus tarichi artificially. This attempt was successful, but the economic productivity was not in the estimated level. These fish live in all the depth of the lake, but during the breeding season, they go into fresh water streams flowing into the lake.To find out the reasons of the productivity losses, new hydrobiological investigations have been going on since 1969. Two research stations have been chosen (Fig. 1), where water, plankton and bottom samplings have been collected for hydrobiological research. Nansen bottles were used to take the water samples, in 10 m intervals, from the surface of water towards the bottom. The chemical analysis of water have been done according to the standard methods given in Welcher (1963). The Winkler method is used to find out the amount of dissolved oxygen (Welcher, 1963).Plankton was collected in 10 m intervals by usual type Closing net (20 cm dia, mesh size of 0.05 mm). The amount of plankton per m³ has been calculated according to the Settling methods of Welch (1948).Bottom samples were collected by Ekman's Dredge at four different regions marked (a), (b), (c), (d), on Fig. 1. Samples were wet sieved through four graded sieves (mesh sizes 0.5–2.0 mm). The number of the collected bottom animals per m² were calculated.Observations showed that, the direct flow of waste waters having organic materials from the Burdur Sugar Mill, Milk-Cheese factories and Attar of Rose industries and Hemp (Cannabis sativa) maceration remnants go to the bottom of the lake, therefore, unoxygenated and thereby a hydrogensulphonized water layer is formed by the above mentioned waste products. The unoxygenated water layer level increases 2–2.5 m per year towards the surface. This pollution has caused this unexpected loss of productivity of fish, for this water layer harms the bottom feeding and planktonic organisms and restricts the spreading and development of the adopted Chalcalburnus tarichi (PALL. 1881). It is also clear that this situation is a threat to the future of the lake and its environment.     

Systems dynamic model to forecast salinity load to the Colorado River due to urbanization within the Las Vegas Valley

This study evaluates the impact of urban growth in the Las Vegas Valley (LVV), Nevada, USA on salinity of the Colorado River. In the past thirty eight years the LVV population has grown from 273,288 (1970) to 1,986,146 (2008). The wastewater effluents and runoff from the valley are diverted back to the Colorado River through the Las Vegas Wash (LVW). With the growth of the valley, the salinity released from urban areas has increased the level of TDS in the wastewater effluents, ultimately increasing the TDS in the Colorado River. The increased usage of water softeners in residential and commercial locations is a major contributor of TDS in the wastewater effluents.Controlling TDS release to the Colorado River is important because of the 1944 Treaty signed between the USA and Mexico. In addition, the agriculture salinity damage cost for the Colorado River has been estimated to be more than $306 a million per year using 2004 salinity levels. With the expected growth of LVV in coming years the TDS release into Lake Mead will increase over time. For this purpose, it is important to investigate future TDS release into the Colorado in anticipation of potential TDS reducing measures to be adopted. In this research, a dynamic simulation model was developed using system dynamics modeling to carry out water and TDS mass balances over the entire LVV. The dynamic model output agreed with historic data with an average error of 2%. Forecasts revealed that conservation efforts can reduce TDS load by 16% in the year 2035 when compared to the current trend. If total population using water softeners can be limited to 10% in the year 2035, from the current 30% usage, TDS load in the LVW can be reduced by 7%.     

基于三阶段DEA-Malmquist的华东地区建筑业效率研究

利用增加值法筛选华东地区7省市2007~2014的建筑业效率评价指标,运用三阶段DEA模型对效率的静态水平进行比较研究,弥补了传统DEA模型忽略环境变量和随机误差的缺陷。在此基础上运用Malmquist指数模型分析建筑业效率的动态变化及原因。结果表明,近7年华东地区建筑业效率呈上升趋势,主要归功于技术进步效率指数。在2008~2009年出现下降情况,归结于建筑业未来形势不明朗,规模效应不稳定;管理粗放体系不完善,纯技术效率负增长。