1- Ph.D. Candidate in Economics, Department of Economics, Payam-e-Noor University, Tehran, Iran , farzaneh.jaidary66@yahoo.com
2- Associate Professor, Department of Economics, Payam-e-Noor University, Tehran, Iran
3- Assistant Professor, Department of Economics, Ilam University, Ilam, Iran
Abstract: (3259 Views)
The water distribution department of urban water and wastewater companies is of natural monopoly characteristic, and requires regulating. The aim of this research is to regulate urban water and wastewater companies in Iran using a price-cap regulation approach to improve their productivity. For this purpose, using the data of municipal water and wastewater companies over the period 2011-2016, the X-factor for the price-cap regulation is calculated using two productivity growth and inefficiency balance scenarios. In this scenario building, the quality of service is included in the calculation of the X factor. Experimental results show that the inclusion of the service quality index in the calculation of X-factor reduces the rate of productivity improvement of the companies. In addition, the more efficient companies have the lower X-factors, and as a result, experience a higher price cap. This reality encourages companies to increase their efficiency and productivity.
Article Type:
Original Research |
Received: 2019/05/7 | Revised: 2020/06/20 | Accepted: 2019/10/2 | Published: 2020/06/21