Title: Capturing the environment, a metafrontier approach to the drinking water sector
Authors: De Witte, Kristof
Marques, Rui C.
Issue Date: Jan-2008
Publisher: KULeuven CES
Series Title: CES - Discussion paper 08.04 pages:1-17
Abstract: Environmental factors add complexity to the comparison between specific activities or entire entities. Decision making units with an inferior performance are tempted to invoke that their organization is different from the others in the data set. By reinterpreting and extending the metafrontier literature, we propose an all-embracing concept to fully capture the operational environment. We suggest the ‘Group Specific Technical Efficiency’ as a new measure to assess the overall efficiency of a utility while allowing for environmental differences. A real-world example of drinking water utilies out of 5 different countries illustrates the concept.

JEL Classification: C14, C61, D24, L95

Keywords: Free Disposal Hull, Efficiency Measurement, Environmental Variables, Metafrontier, Water Industry
Publication status: published
KU Leuven publication type: IR
Appears in Collections:Research Center of Public Economics, Leuven

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