Economic effects of ownership in the water supply industry: A quantitative analysis

A data set of apparently higher quality than has been available previously was derived from two independent sources and applied to an analysis of the economic effects of publicly owned water utilities as compared to privately owned water utilities in the United States. The analysis evaluated the conditions of technical efficiency, relative efficiency, and revenue rates in the utilities. Although the cost structures of utilities under the two alternative modes of ownership appear to be similar, the specific conditions of technical and relative efficiency are found, on average, to differ between the two types of utilities. Privately owned water utilities are found to be technically efficient as well as relatively more efficient than the publicly owned utilities. The publicly owned water utilities on the other hand are neither technically nor relatively efficient, compared to their privately owned counterparts.;Revenue accrued to privately owned water utilities at a higher rate than to publicly owned organizations who, on average, are found to earn below the industrial average.;The study also evaluated the conditions of risk and the sensitivity of performance indicators to ownership types. The risk of sustaining losses is found to be higher in public water utilities than in private water utilities. Most performance indicators are found to be sensitive to public ownership.