Capturing the Environment: A Metafrontier Approach to the Drinking Water Sector

17 Pages Posted: 17 Jan 2008

See all articles by K. De Witte

K. De Witte

University of Leuven (KUL); Maastricht University

Rui Cunha Marques

Technical University of Lisbon (UTL) - Centre for Management Studies (CEG-IST)

Date Written: January 2008

Abstract

Environmental factors add complexity to the comparison between specific activities or entire entities. Decision making units with an inferior performance are tempted to invoke that their organization is different from the others in the data set. By reinterpreting and extending the metafrontier literature, we propose an all-embracing concept to fully capture the operational environment. We suggest the 'Group Specific Technical Efficiency' as a new measure to assess the overall efficiency of a utility while allowing for environmental differences. A real-world example of drinking water utilities out of 5 different countries illustrates the concept.

Keywords: Free Disposal Hull, Efficiency Measurement, Environmental Variables, Metafrontier, Water Industry

JEL Classification: C14, C61, D24, L95

Suggested Citation

De Witte, Kristof and Marques, Rui Cunha, Capturing the Environment: A Metafrontier Approach to the Drinking Water Sector (January 2008). Available at SSRN: https://ssrn.com/abstract=1084807 or http://dx.doi.org/10.2139/ssrn.1084807

Kristof De Witte (Contact Author)

University of Leuven (KUL) ( email )

Naamsestraat 69
Leuven, Vlaams Brabant B-3000
Belgium

HOME PAGE: http://www.feb.kuleuven.be

Maastricht University ( email )

Boschstraat 24
Maastricht, Vlaams-Brabant 6211 AX
Netherlands
003216326656 (Phone)

HOME PAGE: http://www.feb.kuleuven.be

Rui Cunha Marques

Technical University of Lisbon (UTL) - Centre for Management Studies (CEG-IST) ( email )

Technical University of Lisbon
Avenida Rovisco Pais
Lisbon, 1049-001
Portugal
+351218418305 (Phone)

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