Under the terms of the Water Act 1989, the Office of Water Services (Ofwat) was established and given responsibility for the economic regulation of the English and Welsh water industry. One of the concepts underpinning the new regulatory regime was comparative or 'yardstick' competition. Implementation of the regime required the establishment of a methodology for comparative efficiency measurement. The thesis presents econometric results from estimates of a series of ordinary and stochastic frontier cost functions. These are used to compare the efficiency of operators in both the water supply and sewage treatment branches of the industry. A new water supply database covering the period 1977/86 is constructed for the purpose, and the comparative efficiency rankings for both branches of the industry are shown to be robust. Fieldwork methods are used to analyse the role of yardstick competition in the regulatory regime and the way in which the comparative efficiency results could be applied. The fieldwork covers twelve interviews with officials of water companies, and one with the Director General of Water Services. Based on results on both quantitative and qualitative work, conclusions are drawn as to whether yardstick competition is a more widely applicable regulatory device.
| Identifer | oai:union.ndltd.org:bl.uk/oai:ethos.bl.uk:661608 |
| Date | January 1994 |
| Creators | Sawkins, John William |
| Publisher | University of Edinburgh |
| Source Sets | Ethos UK |
| Detected Language | English |
| Type | Electronic Thesis or Dissertation |
| Source | http://hdl.handle.net/1842/21517 |
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