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Cost efficiency of Slovenian water distribution utilities : an application of stochastic frontier methods

Filippini, Massimo ; Hrovatin, Nevenka ; Zorić, Jelena

In: Journal of productivity analysis, 2008, vol. 29, no. 2, p. 169-182

This study estimates cost inefficiency and economies of scale of Slovenian water distribution utilities over the 1997-2003 period by employing several different stochastic frontier methods. The results indicate that significant cost inefficiencies are present in the utilities. An introduction of incentive-based price regulation scheme might help resolve this problem. However, the inefficiency...