Dynamic Efficiency in Regulation of Urban Water and Wastewater Companies of Iran

Document Type : Research Paper


1 . Ph.D. Student of Economics, Department of Economics, Payam-e-Noor University, Tehran

2 Professor, Department of Economics, Payam-e-Noor University, Tehran

3 Associate Professor, Department of Economics, Payam-e-Noor University, Tehran,, Iran

4 Assistant Professor, Department of Economics, Ilam University


The purpose of this study is to apply dynamic efficiency in regulation of urban water and wastewater companies in Iran. To this end, a dynamic stochastic frontier model that considers the heterogeneity in the long-term technical eficiency of the companies has been used to estimate the dynamic efficiency of 35 urban water and wastewater companies for the period of 2011-16 using the Bayesian approach. The research findings show that, in the absence of heterogeneity among companies, the inefficiency persistence is greater than the time when this heterogeneity is considered.
JEL Classification: D24, D21, L95, L43, L51


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