Assessing the efficiency of Chilean water and sewerage companies accounting for uncertainty

What is it about?

We assess, for the first time, the efficiency of a sample of Chilean WaSCs by using a DEA model with statistical tolerance in the data. The results illustrate that outputs exhibit larger uncertainty than inputs. Moreover, WaSCs efficiency scores change significantly under the bestcase and worst-case scenarios. The ranking of the WaSCs allows for the identification of which of them has the highest performance based on their efficiency scores. This information is essential to enhance efficiency and innovation in the water industry.

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Why is it important?

Efficiency assessment of water and sewerage companies (WaSCs) has attracted considerable attention both for water company managers and water regulators. Conventional models do not account for uncertainty in the data. To overcome this limitation, we assess, for the first time, the efficiency of a sample of Chilean WaSCs by using a model with statistical tolerance in the data. The introduction of uncertainty in the efficiency assessment allows for the prediction and ranking of future performance of WaSCs.