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.     

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 utility efficiency assessment in Italy by accounting for service quality: An empirical investigation

In Italy's water industry, publicly owned utilities (PWCs) coexist with public-private partnerships (PPPWCs), that could contribute expertise for operations, funds, and relationships. This paper examines the effect of ownership structures on efficiency by comparing Veneto (with almost all PWCs) and Tuscany (with almost all PPPWCs). This comparison is highly debated, with possible economic, social, environmental, and political implications. A Data Envelopment Analysis approach, that uses both quantitative and qualitative variables to represent the lack of service quality, was adopted. Results suggest that PWCs perform slightly better when quality issues are excluded, while PPPWCs perform better when considering both variable types.     

Water systems in California: Ownership,geography, and affordability

This study asks whether different types of water systems serve different types of communities and differ with respect to affordability. Using 2017 data for California we match service area boundaries with census income data and rate structures to compare the geography, income distribution and affordability of water rates within communities served by systems of different ownership types. We find that for-profit and publicly owned systems serve communities of similar income distributions, while not-for-profit mutual water companies serve higher-income communities. Regulated privately-owned systems charge more for water while providing more low-income assistance and shutting off fewer households than publicly owned systems.     

Water and heat transport in boreal soils: implications for soil response to climate change

Soil water content strongly affects permafrost dynamics by changing the soil thermal properties. However, the movement of liquid water, which plays an important role in the heat transport of temperate soils, has been under-represented in boreal studies. Two different heat transport models with and without convective heat transport were compared to measurements of soil temperatures in four boreal sites with different stand ages and drainage classes. Overall, soil temperatures during the growing season tended to be over-estimated by 2-4 °C when movement of liquid water and water vapor was not represented in the model. The role of heat transport in water has broad implications for site responses to warming and suggests reduced vulnerability of permafrost to thaw at drier sites. This result is consistent with field observations of faster thaw in response to warming in wet sites compared to drier sites over the past 30 years in Canadian boreal forests. These results highlight that representation of water flow in heat transport models is important to simulate future soil thermal or permafrost dynamics under a changing climate.     

Cost and productivity effects of demographic changes on local water service

We investigate the impact of demographic changes on local public services taking the case of water service. We apply a structural production function approach to a large panel of German water utilities between 2003 and 2014. Exploring variation of population density and the population age structure across service areas and over time, we provide evidence that demographics and their changes significantly affect the utilities’ productivity and costs. We find that demographic changes cause significant cost increases in rapidly shrinking and ageing regions. Our results provide important policy implications regarding the prevention of growing regional disparities in public services.     

Effect of humidity on human comfort and productivity after step changes from warm and humid environment

Subjective experiments were conducted to evaluate the effects of humidity on human comfort and productivity under transient conditions from hot and humid environment to thermally neutral condition. Two climate chambers, “Chamber 1” and “Chamber 2”, adjoined each other were used for this study. Subjects were exposed to 30 °C/70%RH air in Chamber 1 for 15 min with 2.0 met of metabolic rate. Then they moved into Chamber 2, where 4 humidity conditions, 30, 40, 50 and 70%RH were examined. Air temperature was adjusted to keep SET* constant at 25.2 °C for all conditions. Subjects were exposed in Chamber 2 for 180 min performing 2 kinds of simulated office work.

Positive effects of low humidity on subjective pleasantness were found under transient condition at low humidity due to more evaporation from human body, while no significant difference in thermal sensation and humidity sensation among 4 relative humidity levels was obtained. Subjective performance was found to be at the same level under all conditions. However, subjects reported to be more tired at 70%RH after humidity step change.     

Benchmarking on-site productivity in France and the UK: a CALIBRE approach

Construction is an increasingly global industry, and benchmarking initiatives that are restricted to a single country run the risk of complacency, as national best practice falls out of line with international best practice. The aim of this article is to report the results of a detailed comparative analysis of the on-site performance of the UK and French divisions of a major UK construction corporation. It focuses on structural concrete because this is potentially a major element in the budget and programme of any construction project, and an area of known French strength. It deploys an innovative computerized productivity measurement tool based on activity sampling, ‘CALIBRE’, in order to provide detailed comparative data. The results show that the UK productivity performance is poorer than in France, and that the poor UK performance compared with the French is explained by elaborate divisions of labour, lack of investment in plant, and less effective work organization. However, as will be argued in the conclusions, these differences cannot be understood without reference to the overall contracting system and the constraints upon action that it imposes.     

Biodiversity accountability in water utilities: A case study

Caring for biodiversity is a significant challenge for companies worldwide. The role of water utilities in this context is pivotal: as key actors in providing core services while balancing the interests of the many stakeholders interested in their activity, water utilities are adopting different accounting tools to increase their accountability. To understand the motivations and to explore the mechanisms underlying water utilities' biodiversity accountability practices, a case study is developed. Findings reveal how normative isomorphism, and coercive requirements, is driving water utilities accountability. Also, the study reveals the centrality of integrated reporting and alternative accounting practices for disclosing on biodiversity.     

Water policy,climate change and adaptation in South Asia

Scarcity will affect nearly two-thirds of the world in the near future. The impacts of climate change are likely to exacerbate these problems and unless appropriate adaptation strategies are adopted, resilience is difficult to achieve. The paper surveys the water resources available in South Asian countries and takes into account the projected climate change impacts on these resources. The paper also analyses the water policies and formulates a conceptual water policy framework in which adaptation is central.     

Forecasting construction industry demand,price and productivity in Singapore: the BoxJenkins approach

In academic research, the traditional Box-Jenkins approach is widely acknowledged as a benchmark technique for univariate methods because of its structured modelling basis and acceptable forecasting performance. This study examines the versatility of this approach by applying it to analyse and forecast three distinct variables of the construction industry, namely, tender price, construction demand and productivity, based on case studies of Singapore. In order to assess the adequacy of the Box-Jenkins approach to construction industry forecasting, the models derived are evaluated on their predictive accuracy based on out-of-sample forecasts. Two measures of accuracy are adopted, the root mean-square-error (RMSE) and the mean absolute percentage error (MAPE). The conclusive findings of the study include: (1) the prediction RMSE of all three models is consistently smaller than the model's standard error, implying the models' good predictive performance; (2) the prediction MAPE of all three models consistently falls within the general acceptable limit of 10%; and (3) among the three models, the most accurate is the demand model which has the lowest MAPE, followed by the price model and the productivity model.     

Performance assessment of the Chilean water sector: A network data envelopment analysis approach

This study applies a two-stage network structure model to evaluate water service providers cost and operational performance embracing service quality variables. An empirical analysis of the Chilean water and wastewater industries over the 2010–2018 period is presented. Moreover, in the second stage of analysis, we analyzed the impact of a set of exogenous variables on the performance of water companies. Results revealed that the Chilean water companies had notable room to reduce costs and improve operational performance. Moreover, it was found that the public water provider performed better than fully private and concessionary water providers.     

Measuring and comparing the efficiency of water utility companies: A data envelopment analysis approach

This study provides an analysis of Italian water utilities to determine the effects on their efficiency of certain relevant variables that have been broadly discussed in the existing literature. We reviewed the annual financial statements of 43 Italian water utility companies and obtained other technical data from Co.n.vi.r.i., the Italian national authority for water. Using data envelopment analysis we assessed their cost efficiencies and, using non-parametric statistic methods, we discuss the significant differences among clusters.We found that ownership structure, size and geographical location had an impact on the performance of water utilities, although with different degrees of significance.     

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.     

Neurobehavioral approach for evaluation of office workers' productivity: The effects of room temperature

Indoor environment quality has great influence on worker's productivity, and how to assess the effect of indoor environment on productivity remains to be the major challenge. A neurobehavioral approach was proposed for evaluation of office workers' productivity in this paper. The distinguishing characteristic of neurobehavioral approach is its emphasis on the identification and measurement of behavioral changes, for the influence of environment on brain functions manifests behaviorally. Therefore worker's productivity can be comprehensively evaluated by testing the neurobehavioral functions. Four neurobehavioral functions, including perception, learning and memory, thinking, and executive functions were measured with nine representative psychometric tests. The effect of room temperature on performance of neurobehavioral tests was investigated in the laboratory. Four temperatures (19 °C, 24 °C, 27 °C, and 32 °C) were investigated based on the thermal sensation from cold to hot. Signal detection theory was utilized to analyze response bias. It was found that motivated people could maintain high performance for a short time under adverse (hot or cold) environmental conditions. Room temperature affected task performance differentially, depending on the type of tasks. The proposed neurobehavioral approach could be worked to quantitatively and systematically evaluate office workers' productivity.     

Circular economy in the water and wastewater sector: Tariff impact and financial performance of SMARTechs

This paper proposes a financial evaluation of the investment in SMARTechs in wastewater companies. SMARTechs are innovative technologies that enable companies to work toward the circular economy approach, thanks to allowing the development of by-products from wastewater. A simulation of the financial impact of the SMARTech introduction was conducted based on the Italian tariff system. It is performed assuming two different scenarios. These relate to a market's presence (or absence) for the by-products resulting from the application of SMARTechs. The results show that investing in these technologies provides both financial and environmental benefits.     

Changes in the total costs of the English and Welsh water and sewerage industry: The decomposed effect of price and quantity inputs on efficiency

Understanding what drives changes in regulated water companies' costs is of great relevance to water regulators. This study decomposes and estimates the change in total costs for a sample of ten water and sewerage companies in England and Wales from 1993 to 2016. The results demonstrate that companies' total costs increased over time due to increases in input prices and input quantity. Any gains obtained from the efficient allocation of resources and technical progress were lost due to mergers and technical inefficiency. Finally, we link our results with the regulatory cycle to evaluate the impact of the regulatory regime on companies' costs and discuss some policy implications.     

A diagnostic tool for estimating the incidence of subsidies delivered by water utilities in low- and medium-income countries,with illustrative simulations

It is conventional wisdom that poor households use less water than rich households, and intuition suggests that an increasing block tariff with a lifeline block will target subsidies to poor households. In this paper we provide a simple diagnostic tool that a water utility can use to estimate the distribution of subsidies to households in different income quintiles and to check whether this intuition about the incidence of subsidies is correct in a specific local service area. The results of our illustrative simulations calibrated using data from low- and medium-income countries, show that subsidies delivered through the most common tariff structures are very poorly targeted to poor households. This finding holds regardless of the specific characteristics of the tariff structure used to calculate households’ water bills. We also find that the higher the correlation between household income and water use, the lower the proportion of total subsidies received by poor households.