Efficiency in the provision of drinking water: A stochastic frontier analysis
DOI:
https://doi.org/10.24850/j-tyca-2025-04-09Keywords:
Technical efficiency, water, stochastic frontier, cost, EcuadorAbstract
Understanding the role that various factors play in explaining technical efficiency is crucial for establishing appropriate regulatory frameworks and policies aimed at improving efficiency levels, especially in the provision of public services such as drinking water supply. This study aims to calculate the cost-oriented technical efficiency level of Ecuador's drinking water service providers and analyze their determinants. To achieve this goal, the parametric Stochastic Frontier Analysis (SFA) method was applied using 2019 data from the economic environmental information statistics in municipal decentralized autonomous governments published by the National Institute of Statistics and Census (INEC). The results show that drinking water providers in Ecuador could save costs while maintaining the current level of drinking water production used for service provision. Factors that explain efficiency include the economic level of the canton, customer density, water extraction sources, and the need for pumping in service provision. The findings suggest that public policies should focus on addressing these specific factors to improve efficiency in the sector, promoting cooperation and exchange of experiences among providers.
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