Title

Consistency in performance rankings : the Peru water sector

Document Type

Journal article

Source Publication

Applied Economics

Publication Date

1-1-2008

Volume

40

Issue

6

First Page

793

Last Page

805

Abstract

Regulators can utilize a number of alternative methodologies for comparing firm efficiency, but these approaches need to be robust to be accepted by stakeholders. This study evaluates the consistency of water-utility performance rankings for Peruvian water utilities. The results indicate that data envelopment analysis (DEA) and stochastic frontier analysis (SFA) yield similar rankings in this case. In addition, the techniques have comparable success for identifying the best and worst performing utilities. However, these rankings based on sophisticated statistical techniques are not highly correlated with those developed by the Peruvian water regulator (SUNASS). This result does not invalidate the performance rankings obtained by the regulator, since those rankings are based on more dimensions of utility performance. However, they illustrate the importance of developing sound techniques for identifying weak utilities. Improvements in sector performance require that benchmarking be given greater attention than in the past.

DOI

10.1080/00036840600749409

Print ISSN

00036846

Publisher Statement

Access to external full text or publisher's version may require subscription.

Full-text Version

Publisher’s Version

Language

English

Recommended Citation

Berg, S., & Lin, C. (2008). Consistency in performance rankings: The Peru water sector. Applied Economics, 40(6), 793-805. doi: 10.1080/00036840600749409

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