Title: Is a little sunshine all we need? On the impact of sunshine regulation on profits, productivity and prices in the Dutch drinking water sector
Authors: De Witte, Kristof ×
Saal, David #
Issue Date: Jun-2010
Publisher: Kluwer Academic Publishers
Series Title: Journal of Regulatory Economics vol:37 issue:3 pages:219-242
Abstract: This paper analyzes the performance of Dutch drinking water utilities before and after the introduction of sunshine regulation, which involves publication of the performance of utilities but no formal price regulation. By decomposing profit change into its economic drivers, our results suggest that, in the Dutch political and institutional context, sunshine regulation was effective in improving the productivity of publicly organised services. Nevertheless, while sunshine regulation did bring about a moderate reduction in water prices, sustained and substantial economic profits suggest that it may not have the potential to fully align output prices with economic costs in the long run. In methodological terms, the DEA based profit decomposition is extended to robust and conditional non-parametric efficiency measures, so as to account better for both uncertainty and differences in operating environment between utilities.
ISSN: 0922-680X
Publication status: published
KU Leuven publication type: IT
Appears in Collections:Research Center of Public Economics, Leuven
Teacher Training, Faculty of Economics and Business, Leuven
× corresponding author
# (joint) last author

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