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Welfare consequences of water supply alternatives in rural Tunisia
Author(s) -
Zekri Slim,
Dinar Ariel
Publication year - 2003
Publication title -
agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.29
H-Index - 82
eISSN - 1574-0862
pISSN - 0169-5150
DOI - 10.1111/j.1574-0862.2003.tb00130.x
Subject(s) - inefficiency , production (economics) , economic surplus , welfare , water supply , willingness to pay , economics , point (geometry) , service (business) , business , social welfare , public economics , natural resource economics , agricultural economics , microeconomics , market economy , economy , geometry , mathematics , environmental engineering , political science , law , engineering
Many economic studies have addressed the issue of inefficiency of public water supply in rural areas and the potential for improved service by private companies. Many of these analyses focused on identifying either willingness to pay or comparing average service costs and prices paid by customers. This paper performs a welfare analysis of two water supply systems—public and self owned—in rural Tunisia. The paper calculates consumer and producer surplus and compares the performance of the two systems from a social point of view. Results suggest that both systems are inefficient, mainly because of a production level that is low compared with production capacity.