Empirical Evidence for Efficiency in Provision of Drinking Water

Abstract

The purpose of this paper is twofold. First, it assesses the efficiency of the drinking water supply in the Spanish municipalities of over 5,000 inhabitants. Second, it examines the hypothesis that this efficiency is conditioned by a group of environmental variables. Unlike monitoring reports based on descriptive methods, this paper uses the double data envelopment analysis bootstrap procedure to ascertain efficiency determinants. The results show that municipalities could improve their efficiency by modifying the scale at which they are operating. Regarding the determinants of efficiency, population density has been found to have a positive effect on the level of efficiency in the public service covered by this study. Moreover, it is shown that most tourist municipalities are more efficient at managing water supply service. These findings also suggest that there is greater efficiency when the provision of drinking water is managed directly by the local government. Finally, no significant impact of citizens’ level of income, political ideology, and strength on drinking water supply efficiency is found.