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Estimating the Relative Efficiency of Brazilian Publicly and Privately Owned Water Utilities: A Stochastic Cost Frontier Approach 1
Author(s) -
Da Silva e Souza Geraldo,
De Faria Ricardo Coelho,
Moreira Tito Belchior S.
Publication year - 2007
Publication title -
jawra journal of the american water resources association
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.957
H-Index - 105
eISSN - 1752-1688
pISSN - 1093-474X
DOI - 10.1111/j.1752-1688.2007.00106.x
Subject(s) - frontier , econometrics , inference , statistical inference , cost efficiency , cobb , measure (data warehouse) , maximum likelihood , economics , quadratic equation , stochastic frontier analysis , statistics , mathematics , production (economics) , microeconomics , computer science , geography , geometry , archaeology , database , artificial intelligence , biology , genetics , operating system
This paper assesses cost efficiencies of Brazilian public and private companies of water supply. To measure the efficiency, we used a stochastic frontier model derived from the translog family – a specification similar to a Cobb‐Douglas including a quadratic term in log output. The model parameters are estimated by maximum likelihood using Brazilian data for the year 2002. Statistical inference leads to the conclusion that there is no evidence that private firms and public firms are significantly different in terms of efficiency measurements.