AWWA JAW63487 Journal AWWA - Economies of Scale In Community Water Systems

Journal Article by American Water Works Association, 09/01/2006

Shih, Jhih-Shyang; Harrington, Winston; Pizer, William A.; Gillingham, Kenneth

Full Description

Data sets from the U.S. Environmental Protection Agency's1995 and 2000 Community Water Systems surveyswere used to examine the production costs of water supplysystems. The authors estimate water supplyeconomies of scale by estimating the elasticities of boththe total unit cost and the individual component costs.For total unit cost, they found that a 1% productionincrease reduced unit costs by a statistically significant0.16%. For individual component costs, highereconomies of scale in capital, materials, outside services,and other costs and lower, but still positive, economies ofscale in labor and energy costs were found. Theseeconomies of scale may reflect production economies orsuggest that larger systems are better than smaller systemsat bargaining and receiving services and materials at alower unit cost. Importantly, bargaining gains and someproduction economies do not necessarily depend onwater systems becoming physically interconnected. Includes 12 references, tables, figures.

Product Details

Edition: Vol. 98 - No. 9 Published: 09/01/2006 Number of Pages: 9 File Size: 1 file , 190 KB