Abstract Privatised water companies in England and Wales are subject to economic regulation by the industry regulator (Ofwat). Ofwat sets 5-year caps on the prices’ companies can charge their customers. These caps are in part based on the benchmarking of companies’ costs. Ofwat has not previously used econometrics to benchmark domestic retail costs, but it undertook such modelling in its 2019 price review analysis. This is the first journal article to present an efficiency analysis of domestic water retail costs in England and Wales. Our approach is different from Ofwat’s, as we propose two new ways of accounting for differences in the effect on cost of the number of single and dual service customers (water/sewerage-only and water and sewerage). Some companies’ cost efficiencies vary greatly between the two ways. Depending on the approach to price capping, this could possibly have non-negligible implications for companies’ caps.

中文翻译：

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英格兰和威尔士的水零售成本效率基准

摘要英格兰和威尔士的私有水务公司受行业监管机构（Ofwat）的经济监管。Ofwat对公司可以向客户收取的价格设置5年上限。这些上限部分基于公司成本的基准。Ofwat以前没有使用计量经济学来衡量国内零售成本，但它在其2019年价格审查分析中进行了这种建模。这是第一篇对英格兰和威尔士的家庭用水零售成本进行效率分析的期刊文章。我们的方法与Ofwat的方法不同，因为我们提出了两种新的方法来解决单一和双重服务客户数量对成本的影响（纯水/污水处理系统以及水和污水处理系统）。两种方法之间，一些公司的成本效率差异很大。