Volume 20, Issue 2 (2020)                   QJER 2020, 20(2): 29-52 | Back to browse issues page

‎ 20.1001.1.17356768.1399.20.2.4.7

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Jaydari F, Khodadad kashi F, Abolhasani A, Darvishi B. Price Cap Regulation Approach to Improve Productivity in Iranian Municipal Water and Wastewater Companies. QJER 2020; 20 (2) :29-52
URL: http://ecor.modares.ac.ir/article-18-32721-en.html
Price Cap Regulation Approach to Improve Productivity in Iranian Municipal Water and Wastewater Companies
Farzaneh Jaydari * 1, Farhad Khodadad kashi2 , Asghar Abolhasani2 , Bagher Darvishi3
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:   (3260 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.
Keywords: Regulation, Price-cap, urban water and wastewater companies, Iran, X- factor, Quality
Full-Text [PDF 1278 kb]   (1683 Downloads)    
Article Type: Original Research |
Received: 2019/05/7 | Revised: 2020/06/20 | Accepted: 2019/10/2 | Published: 2020/06/21
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