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Profit, productivity and price performance changes in the water and sewerage industry: an empirical application for England and Wales

journal contribution
posted on 16.11.2015, 15:55 by Alexandros Maziotis, David S. Saal, Emmanuel Thanassoulis, Maria Molinos-Senante
This paper aims to analyse the impact of regulation in the financial performance of the Water and Sewerage companies (WaSCs) in England and Wales over the period 1991–2008. In doing so, a panel index approach is applied across WaSCs over time to decompose unitspecific index number-based profitability growth as a function of the profitability, productivity and price performance growth achieved by benchmark firms, and the catch up to the benchmark firm achieved by less productive firms. The results indicated that after 2000 there is a steady decline in average price performance, while productivity improves resulting in a relatively stable economic profitability. It is suggested that the English and Welsh water regulator is now more focused on passing productivity benefits to consumers, and maintaining stable profitability than it was in earlier regulatory periods. This technique is of great interest for regulators to evaluate the effectiveness of regulation and companies to identify the determinants of profit change and improve future performance, even if sample sizes are limited.

Funding

The authors would like to express their gratitude for the support of the Economic and Social Science Research Council as well as the Office of Water Services (Ofwat).

History

School

  • Business and Economics

Department

  • Economics

Published in

CLEAN TECHNOLOGIES AND ENVIRONMENTAL POLICY

Volume

17

Issue

4

Pages

1005 - 1018 (14)

Citation

MAZIOTIS, A. ...et al., 2015. Profit, productivity and price performance changes in the water and sewerage industry: an empirical application for England and Wales. Clean Technologies and Environmental Policy, 17(4), pp. 1005-1018.

Publisher

© Springer

Version

VoR (Version of Record)

Publisher statement

This work is made available according to the conditions of the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0) licence. Full details of this licence are available at: https://creativecommons.org/licenses/by-nc-nd/4.0/

Publication date

2015

Notes

This paper is in closed access.

ISSN

1618-954X

Language

en