Capturing the environment, a metafrontier approach to the drinking water sector.

Environmental factors add complexity to the comparison between specific activities or entire entities. Decision making units with an inferior performance are tempted to invoke that their organization is different from the others in the data set. By reinterpreting and extending the metafrontier literature, we propose an all-embracing concept to fully capture the operational environment. We suggest the ‘Group Specific Technical Efficiency’ as a new measure to assess the overall efficiency of a utility while allowing for environmental differences. A real-world example of drinking water utilies out of 5 different countries illustrates the concept. JEL Classification: C14, C61, D24, L95Free Disposal Hull, Efficiency Measurement, Environmental Variables, Metafrontier, Water Industry

How are Teachers Teaching? A Nonparametric Approach

This paper examines which conguration of teaching activities (expressed in, e.g., problem solving, homework, lecturing) maximizes student performance. To do so, it formulates a non- parametric eciency model that is rooted in the Data Envelopment Analysis literature. In the model, we account for (1) self selection of students and teachers in better schools, and (2) complementary teaching activities. The analysis distinguishes both individual teaching (i.e., a personal teaching style adapted to the individual needs of the student) and collective teaching (i.e., a similar style for all students in a class). Exploiting the data set, we compare the actual teaching style as revealed by the teacher in the data to the model estimations. As such, we anal- yse which students in the class the teacher is targeting with his/her teaching style. The main results show that high test scores are associated with teaching styles that emphasise problem solving and homework. In addition, teachers seem to adapt their optimal teaching style on the 70 percent least performing students.Data Envelopment Analysis, Teacher Quality, Student Performance, Nonparametric estimation, Revealed teaching style

Big and beautiful? On non-parametrically measuring scale economies in non-convex technologies

Knowledge on the scale economies drives the incentives of regulators, governments and individual utilities to scale-up or scale-down the scale of operations. This paper considers the returns to scale (RTS) in non-convex frontier models. In particular, we evaluate RTS assumptions in a Free Disposal Hull model, which accounts for uncertainty and heterogeneity in the sample. Additionally, we provide a three-step framework to empirically analyze the existence and extent of RTS in real world applications. In a first step, the presence of scale (and scope) economies is verified. Secondly, RTS for individual observations are examined while in a third step we derive the optimal scale for a sector as a whole. The framework is applied to the Portuguese drinking water sector where we find the optimal scale to be situated around 7 to 10 million m3.Free Disposal Hull, economies of scale, optimal size, water sector

Designing incenttives in local public utilities, an international comparison of the drinking water sector

Direct and indirect standardization procedures aim at comparing differences in health or differences in health care expenditures between subgroups of the population after controlling for observable morbidity differences. There is a close analogy between this problem and the issue of risk adjustment in health insurance. We analyse this analogy within the theoretical framework proposed in the recent social choice literature on responsibility and compensation. Traditional methods of risk adjustment are analogous to indirect standardization. They are equivalent to the so-called conditional egalitarian mechanism in social choice. In general, they do not remove incentives for risk selection, even if the effect of non-morbidity variables is correctly taken into account. A method of risk adjustment based on direct standardization (as proposed for Ireland) does remove the incentives for risk selection, but at the cost of violating a neutrality condition, stating that insurers should receive the same premium subsidy for all members of the same risk group. Direct standardization is equivalent to the egalitarianequivalent (or proportional) mechanism in social choice. The conflict between removing incentives for risk selection and neutrality is unavoidable if the health expenditure function is not additively separable in the morbidity and efficiency variables.

Capturing the environment, a metafrontier approach to the drinking water sector

Environmental factors add complexity to the comparison between specific activities or entire entities. Decision making units with an inferior performance are tempted to invoke that their organization is different from the others in the data set. By reinterpreting and extending the metafrontier literature, we propose an all-embracing concept to fully capture the operational environment. We suggest the ‘Group Specific Technical Efficiency’ as a new measure to assess the overall efficiency of a utility while allowing for environmental differences. A real-world example of drinking water utilies out of 5 different countries illustrates the concept.Free Disposal Hull, Efficiency Measurement, Environmental Variables, Metafrontier, Water Industry

Selective Migration in New Towns: Influence on Regional Accountability in Early School Leaving

In an attempt to stop the rampant suburbanization, which countries experienced after World War II, a 'new town' policy was enrolled. As a major objective, and related to its origins, new towns were effective in attracting low and medium income households. Nowadays, cities and municipalities experience an increased accountability in which incentives are provided by 'naming and shaming'. This paper focuses on an issue where both historical and local policy come together: early school leaving. Using an iterative matching analysis, it suggests how to account for differences in population and regional characteristics. In other words, how to compare and interpret early school leaving in new towns in a more `fair' way. The results point out that (statistically) mitigating historical differences is necessary, even though this does not necessarily means that 'naming' is replaced by 'shaming'.Urban Economics; New Town; Early School Leaving; Naming and Shaming; Iterative Matching, Urban Planning

Longevity of clonal plants: why it matters and how to measure it

Background Species' life-history and population dynamics are strongly shaped by the longevity of individuals, but life span is one of the least accessible demographic traits, particularly in clonal plants. Continuous vegetative reproduction of genets enables persistence despite low or no sexual reproduction, affecting genet turnover rates and population stability. Therefore, the longevity of clonal plants is of considerable biological interest, but remains relatively poorly known. Scope Here, we critically review the present knowledge on the longevity of clonal plants and discuss its importance for population persistence. Direct life-span measurements such as growth-ring analysis in woody plants are relatively easy to take, although, for many clonal plants, these methods are not adequate due to the variable growth pattern of ramets and difficult genet identification. Recently, indirect methods have been introduced in which genet size and annual shoot increments are used to estimate genet age. These methods, often based on molecular techniques, allow the investigation of genet size and age structure of whole populations, a crucial issue for understanding their viability and persistence. However, indirect estimates of clonal longevity are impeded because the process of ageing in clonal plants is still poorly understood and because their size and age are not always well correlated. Alternative estimators for genet life span such as somatic mutations have recently been suggested. Conclusions Empirical knowledge on the longevity of clonal species has increased considerably in the last few years. Maximum age estimates are an indicator of population persistence, but are not sufficient to evaluate turnover rates and the ability of long-lived clonal plants to enhance community stability and ecosystem resilience. In order to understand the dynamics of populations it will be necessary to measure genet size and age structure, not only life spans of single individuals, and to use such data for modelling of genet dynamic

Designing performance incentives, an international benchmark study in the water sector

Cross-country comparisons avoid the unsteady equilibrium in which regulators have to balance between economies of scale and a sufficient number of remaining comparable utilities. By the use of data envelopment analysis, we compare the efficiency of the drinking water sector in the Netherlands, England and Wales, Australia, Portugal and Belgium. After introducing a procedure to measure the homogeneity of an industry, robust order-m partial frontiers are used to detect outlying observations. By applying bootstrapping algorithms, bias-corrected first and second stage results are estimated. Our results suggest that incentive regulation in the sense of regulatory and benchmark incentive schemes have a significant positive effect on efficiency. By suitably adapting the conditional efficiency measures of Daraio and Simar (Advanced robust and nonparametric methods in efficiency analysis. Springer, New York 2007) to the bias corrected estimates of Simar and Wilson (Manage Sci, 44(1): 49-61, 1998), we incorporate environmental variables directly into the efficiency estimates. We firstly equalize the social, physical and institutional environment, and secondly, deduce the effect of incentive schemes on utilities as they would work under similar conditions. The analysis demonstrates that in absence of clear and structural incentives the average efficiency of the utilities falls in comparison with utilities which are encouraged by incentives