Global Study Water Utility Aggregation

The project is an empirical analysis of the consequences of water utility aggregations on performance. The statistical analysis comprises two complementary approaches based on IBNET data: Firstly, an empirical analysis of the performance consequences of aggregations replicates the regional analysis by Klien and Michaud (2016) at the global level using the full IB-Net database. The approach in the first part is to compare how utility performance evolved for utilities which grew through an aggregation with utilities which were not aggregated. Given that in the first part of the analysis we observe only the "acquiring utilities" and that the number of units as well as the time span before and after aggregations is limited, a cross-sectional analysis complements the first part. Specifically, the goal of the second part is to understand how the different configurations of utility structure, which are subject to change in the aggregation process, determine long-term performance differences. To this end, the second part first classifies utilities according to core structural characteristics and compares the performance of the different utility types. To understand more in detail where potential gains from aggregation may arise, both more disaggregate performance measures as well as differences in the cost structure are used.