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<p>Data envelopment analysis (DEA) is an important tool for measuring the efficiency of an urban water utility (UWU). However, when applied to assess UWU efficiency, the analysis makes many UWUs efficient; due to the nature and environment of a water utility, a clustering of efficiency in the water industry is not acceptable. Because a low-ranked UWU analysed in empirical relations has been identified as efficient when using DEA to assess UWU efficiency. To overcome this situation and use DEA like empirical methods to assess the efficiency of UWU in a competitive scenario, a network DEA approach was developed in this study using two years of information. The network-DEA approach incorporates variables that score zero and benchmarks a UWU into the competitive scenario. In this way, the best, intermediates and worst performances are revealed and at the same time inefficient UWUs can learn management practises from the efficient UWU. Other industries can employ the proposed efficiency assessment approach to explore management incentives and improvement operation activities.</p>

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Urban water utility regulation: efficiency assessment and performance improvement using data envelopment analysis

  • 期刊论文

  • 发表日期：

    2025年2月12日

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  • D. K. Gidion

摘要

Data envelopment analysis (DEA) is an important tool for measuring the efficiency of an urban water utility (UWU). However, when applied to assess UWU efficiency, the analysis makes many UWUs efficient; due to the nature and environment of a water utility, a clustering of efficiency in the water industry is not acceptable. Because a low-ranked UWU analysed in empirical relations has been identified as efficient when using DEA to assess UWU efficiency. To overcome this situation and use DEA like empirical methods to assess the efficiency of UWU in a competitive scenario, a network DEA approach was developed in this study using two years of information. The network-DEA approach incorporates variables that score zero and benchmarks a UWU into the competitive scenario. In this way, the best, intermediates and worst performances are revealed and at the same time inefficient UWUs can learn management practises from the efficient UWU. Other industries can employ the proposed efficiency assessment approach to explore management incentives and improvement operation activities.