Frontier efficiency methods have been recurrently used in the water sector to assess the performance of water utilities. These methods are also used for yardstick regulation, with greater efficiency being sought by creating competition between the utilities, which can have an impact on decision-making processes, such as tariff setting. This study analyzes the adequacy and limitations of these methods for regulatory purposes, particularly how they deal with data uncertainty and their capacity to manage large number of variables. In order to achieve this, two representative methods—a nonparametric technique (data envelopment analysis) and an econometric one (stochastic frontier analysis)—are applied to an audited sample of 194 water utilities. Results will show that the results from the methods may not be considered conclusive in the water sector and their application should be carried out with considerable reservations.

中文翻译：

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前沿效率方法是否足以比较水务公用事业的效率以达到监管目的？

水务部门经常使用前沿效率方法来评估水务公司的绩效。这些方法也用于标准监管，通过在公用事业公司之间建立竞争来寻求更高的效率，这可能会对决策过程产生影响，例如关税设定。本研究分析了这些方法用于监管目的的充分性和局限性，特别是它们如何处理数据不确定性及其管理大量变量的能力。为了实现这一目标，对 194 家自来水公司的审计样本应用了两种代表性方法——非参数技术（数据包络分析）和计量经济学方法（随机前沿分析）。