Papers by MARIA MOLINOS SENANTE
npj Clean Water
Benchmarking the dynamic performance of water companies is a powerful tool to develop sound polic... more Benchmarking the dynamic performance of water companies is a powerful tool to develop sound policies. However, it requires the use of reliable and robust methods and quality of data. In this study, the stochastic nonparametric envelopment of data (StoNED) method was employed to assess productivity change and eco-productivity change of a sample of Chilean water companies over the period 2010–2018. The StoNED approach overcomes the main limitations of stochastic frontier analysis and data envelopment analysis techniques which are the most commonly used to evaluate performance of water companies. Productivity change metric focused on the economic performance, whereas eco-productivity change evaluated economic and quality of service performance by including non-revenue water and unplanned water supply interruptions. Hence, this study analyzed the impact of quality of service variables on the dynamic eco-efficiency of water companies. The annual average productivity change and eco-produc...
Waste Management & Research: The Journal for a Sustainable Circular Economy
Eco-efficiency assessment of municipal solid waste (MSW) suppliers is a useful tool in the transi... more Eco-efficiency assessment of municipal solid waste (MSW) suppliers is a useful tool in the transition to a circular economy. Furthermore, it provides evidence of the economic and environmental performance of municipalities that can be used for decision-making and/or elaboration of regulatory policies. In this study, eco-efficiency scores were computed for a sample of 140 Chilean municipalities in the provision of MSW services. In doing so, the stochastic semi-parametric envelopment of data method was applied. It is a novel technique which overcomes the limitations of parametric (stochastic frontier analysis) and non-parametric (data envelopment analysis) methods previously employed to evaluate the eco-efficiency of MSW services. The average eco-efficiency of the 140 assessed municipalities was 0.332 which indicates that they could save 66.8% of their operational costs and recycling the same amount of waste. Moreover, 61.4% of the evaluated municipalities presented an eco-efficiency ...
Environment, Development and Sustainability
The water production system is a complex network and policy makers can get a better insight into ... more The water production system is a complex network and policy makers can get a better insight into how the system operates if they know how efficient each sub-process is. In this study, and for the first time, we employ a two-stage network Data Envelopment Analysis model to evaluate the eco-efficiency of water services in England and Wales, integrating greenhouse gas (GHG) emissions as an undesirable output. We then use regression techniques to determine the impact of environmental variables on a water company’s efficiency. The results indicate that from an economic perspective (first stage), companies need to reduce the costs of running their business by 22.3% on average to produce the same level of services. From an operations and environmental point of view (second stage), companies need to curtail down the levels of inputs and GHG emissions by 32.6% on average to generate the same level of output. Thus, the mean overall eco-efficiency was 0.514, which means that the potential for input and GHG emissions savings among companies was approximately 48.6%. Moreover, the complexity of water treatment and average pumping head could lead to lower eco-efficiency. Several policy implications are finally discussed.
Sustainable Cities and Society
Resources, Conservation and Recycling
PLOS ONE
Evaluating the performance and analyzing the cost drivers of water utilities is of great interest... more Evaluating the performance and analyzing the cost drivers of water utilities is of great interest for water regulators and water sector managers. This study uses a quadratic cost function to investigate the existence of economies of scale and scope in the Chilean water and sewerage industry over the period 2010–2017. We also estimate and decompose productivity growth into technical change and scale efficiency change. Technical change is further broken into pure, non-neutral and scale-augmenting technical change. The results indicate that cost savings can be achieved by increases in the scale of production and the separation of water and sewerage services. Productivity progressed favorably throughout the whole period at an annual rate of 8.4%, which was attributed to the scale effect, the adoption of new technologies and a good allocation of resources. Some policy implications are finally discussed based on our findings.
Water Resources Management, 2021
The water industry encompasses a wide variety of water companies operating with different product... more The water industry encompasses a wide variety of water companies operating with different production technologies. This study evaluated and compared changes to the productivity of several fully private water companies (FPWCs) and concessionary water companies (CWCs). Specifically, the cost Malmquist productivity index was estimated by integrating inputs, outputs and environmental variables. A non-parametric approach was used by applying data envelopment analysis. This approach allowed us to quantify the parameters driving changes to productivity as cost efficiency change (technical and allocative efficiency), cost scale efficiency and cost technical change (technical change and input price effect). Through breaking down the cost Malmquist productivity index, relevant information for supporting decision making process by water companies is possible. To further evaluate the impact of water company heterogeneity on productivity change, the changes (convergence versus divergence) to productivity between group and meta-frontiers was estimated. The approach was applied empirically on a sample of 22 water companies in Chile during 2010–2017. The results showed that the productivity of both FPWCs and CWCs improved over time, with FPWCs performing better compared to CWCs. The main drivers of productivity growth for both types of water companies were scale efficiency, technical efficiency and input price effect. Thus, water companies in Chile could improve productivity by moving to a cost-efficient allocation of their resources. The rate of productivity convergence was higher for CWCs compared to FPWCs. The approaches developed in this study provide information that could be used by water managers to better understand what drives productivity and, thus, delineate strategies to improve performance over time.
International Journal of Sustainable Engineering, 2022
Sustainability, 2021
The management of municipal solid waste sector is crucial for a sustainable circular economy. Was... more The management of municipal solid waste sector is crucial for a sustainable circular economy. Waste utilities are expected to provide high quality solid waste services at an affordable price. The efficient management of solid waste requires its assessment from an economic and environmental perspective, i.e., eco-efficiency assessment. Although the reduction of unsorted waste incurs an economic cost, its positive externalities are huge for the well-being of society, the environment, and people. Our study quantifies the marginal cost of reducing any unsorted waste using stochastic frontier analysis techniques which allow us to estimate the eco-efficiency of the waste sector. Our empirical approach focuses on the municipal solid waste collection and recycling services provided by several waste utilities in Chile. The results indicate that substantial eco-inefficiency in the sector exists, since the average eco-efficiency score is roughly 0.5 which means that the municipalities could ap...
Structural Change and Economic Dynamics, 2022
npj Clean Water, 2022
The path to a sustainable management of the urban water cycle requires the assessment of both ope... more The path to a sustainable management of the urban water cycle requires the assessment of both operational and quality-adjusted efficiency in a unified manner. This can be done by the use of non-radial Data Envelopment Analysis models. This study used Range Adjusted Measure models to evaluate the operational, quality-adjusted, and operational & quality-adjusted efficiency (O&QAE) scores of the Chilean water industry including water leakage and unplanned interruptions as undesirable outputs. It was found that on average water utilities presented large O&QAE scores over time. The mean O&QAE score was 0.964 which means that water utilities could further reduce costs and undesirable outputs by 3.6% on average, while trying to expand the scale of operation. This finding suggests that excellent quality-adjusted efficiency at an efficient expenditure could be feasible. It was also evidenced that customer density, mixed water resources, and ownership influenced the O&QAE of Chilean water com...
Sustainability, 2020
The assessment of wastewater treatment plant (WWTP) performance has gained the interest of water ... more The assessment of wastewater treatment plant (WWTP) performance has gained the interest of water utilities and water regulators. Eco-efficiency has been identified as a powerful indicator, as it integrates economic and environmental variables into a single index. Most previous studies have employed traditional data envelopment analysis (DEA) for the evaluation of WWTP eco-efficiency. However, DEA allows the selection of input and output weights for individual WWTPs for the calculation of eco-efficiency scores. To overcome this limitation, we employed the double-frontier and common set of weights methods to evaluate the eco-efficiency of a sample of 30 WWTPs in Spain. The WWTPs were ranked based on eco-efficiency scores derived under several scenarios including best- and worst-case scenarios; this approach to performance assessment is reliable and robust. Twenty-six of the 30 WWTPs were not classified as eco-efficient, even under the most favorable scenario, indicating that these fac...
Environmental Science and Pollution Research, 2021
Water leakage in the urban water cycle involves relevant economic, social, and environmental nega... more Water leakage in the urban water cycle involves relevant economic, social, and environmental negative impacts. Thus, reducing water leakage is a key challenge for both water regulators and water companies. This study estimated the evolution (2007–2015) of the marginal cost of improving the quality of service in terms of water leakage in the Chilean water industry, which involves full private, concessionary, and public water companies. In water companies, management skills and efforts play an important role in meeting water leakage targets. Thus, this study employed a cost frontier model where it was assumed that unobserved management ability interacts with output and water leakage factors. The results reveal high levels of cost efficiency for the average water company. Management increases outputs and reduces water leakage and, thus, has a positive impact on costs and efficiency. The marginal cost of reducing water leakage is higher for the public water company than for private and concessionary water companies. The average estimated marginal cost of reducing water leakage was 0.349 €/m3, which means that a water company has to spend an extra 0.349 € in operating costs to avoid a cubic meter of water leakage. Some policy implications were discussed based on the results of this study.
Water International, 2021
ABSTRACT This study examines the efficiency and productivity of the Chilean water and sewerage in... more ABSTRACT This study examines the efficiency and productivity of the Chilean water and sewerage industry over the period 2010–2017 using a stochastic cost frontier model. This methodological approach allowed us to evaluate the impact of water companies´ ownership on their productivity. This is very relevant for the Chilean water and sewerage industry which involves a public, full private and concessionary water companies. The results evidenced that the Chilean water and sewerage industry improved its productivity across years. However, the increase in the productivity of full private and concessionary water companies was larger than the one experienced by the public water company.
Socio-Economic Planning Sciences, 2021
The assessment of water companies' efficiency, productivity and quality of service is part of the... more The assessment of water companies' efficiency, productivity and quality of service is part of the process to set water tariffs and therefore, is relevant for regulators and customers. However, the water industry involves several heterogeneous water companies. Following a pioneering approach, this study estimates productivity change and its drivers considering the non-homogeneous nature of the water companies and incorporating quality of service variables as undesirable outputs. In doing so, the metafrontier Malmquist Luenberger productivity index was estimated for a sample of English and Welsh water and sewerage companies (WaSCs) and water only companies (WoCs) over the years 2001-2018. Results reveal that WoCs performed slightly better than WaSCs as WaSCs did not manage to adopt best industry's practice. By contrast, WoCs exhibited notable technical progress. From a policy perspective, we linked the results from productivity change with the regulatory cycle of the English and Welsh water industry. It is found that the 2004, 2009 and 2014 price reviews appeared to have a positive impact on industry's productivity. The methodological approach followed in this study is of great interest for water regulators as it shows how to integrate both quality of service variables and water companies' heterogeneity in productivity change assessment.
Environmental Science and Pollution Research, 2021
Moving to a more sustainable and low-carbon footprint urban water cycle is essential in the light... more Moving to a more sustainable and low-carbon footprint urban water cycle is essential in the light of climate change. In this paper, we estimate the implicit cost of reducing greenhouse gas (GHG) emissions for several English and Welsh water companies from 2013 to 2019. Using econometric techniques, we compute the shadow prices of direct and indirect CO2 emissions associated with the provision of drinking water. This methodological approach also allows us to investigate the impact of a set of environmental variables on the costs of water companies and therefore on the costs of reducing GHG emissions. We then compute the returns to scale, technical change, and technical efficiency of the water companies. The empirical results show the following: (1) the average shadow price of CO2 across years was 0.114 £/kgCO2, which means that the English and Welsh water industry needs to spend an extra £0.114 in operating expenditure to prevent the emission of one kilogramme of CO2; (2) the cost of reducing GHG emissions is very variable among water companies and across years; (3) water taken from boreholes and average pumping head increases cost requirements and therefore the inefficiency of water companies; and (4) the water industry may lower its production costs and thus the costs of reducing GHG emissions by improving its daily operations and adopting new technologies. From a policy perspective, this study evidences that in the English and Welsh water industry, a market-based approach may be more suitable to reduce GHG emissions than a carbon tax policy.
Environmental Science and Pollution Research, 2021
This paper researches the existence of economies of scale and scope in the Chilean water and sewe... more This paper researches the existence of economies of scale and scope in the Chilean water and sewerage industry using a translog cost function approach over the period 2010–2017. It also provides estimates of productivity growth and its determinants, technical change and scale effect. The results suggest that on average, the water industry operates under increasing economies of scale, which implies that further increases in water companies’ scale of operations may be cost beneficial. Economies of scope between water and sewerage services were found for the average company, which suggests that the joint provision of these services may lead to cost savings. An average annual productivity increase of 2.5% was reported with scale effect being the major driver. Full private companies performed better than concessionary and public water companies. The results of our study can be of greater interest to the policy-makers who want to make decisions on introducing policy reforms such as mergers, unbundling of the water and sewerage supply chain, or developing incentives to improve companies’ productivity.
Urban Water Journal, 2020
Estimating productivity change and its determinants is of great importance when measuring the per... more Estimating productivity change and its determinants is of great importance when measuring the performance of a firm. A true random effect cost model was employed to measure the cost efficiency of water companies in England and Wales from 1993 to 2016. Subsequently, total factor productivity change was estimated and decomposed into cost-efficiency change, technical change, scale efficiency change, output effect and residual price effect. The results indicate that the English and Welsh water industry increased its productivity over the period examined at a rate of about 2.1%, and it was influenced primarily by technical change. The price reviews appear to have a positive impact on the productivity of water-only companies during the whole period examined. In the case of water and sewerage companies, the 1994 and 1999 price reviews had a positive impact on productivity, whereas the last two price reviews had an adverse impact.
Urban Water Journal, 2017
The evaluation of the economic efficiency of regulatory schemes is essential for regulators and u... more The evaluation of the economic efficiency of regulatory schemes is essential for regulators and utilities. In this study it is analysed for the first time the welfare costs of the regulation in the water supply in England and Wales, by computing the deadweight loss of the water only companies (WoCs) that existed over the period of 1993-2009. The results indicate that the current regulation can have substantial efficiency costs. Our estimates show that the loss of efficiency for the WoCs lies between 15 and 60 million GBP over the period 1993-2009. These amounts could have been redistributed either to the companies in terms of profits or to the consumers via price reductions. The methodology and results of this study are of great interest for both regulators and water utilities managers to evaluate the effectiveness of regulation and make informed decisions.
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Papers by MARIA MOLINOS SENANTE