抄録
This paper investigates returns to scale estimated by the production function of the public water industry in Nishinomiya City, Hyogo Pref., Japan. In terms of the characteristics of a water industry, the estimation adopted the following three improvements by comparing with previous works ;
1. defining estimation sample unit not as “city” but as “water treatment plant and its distribution network” in a city,
2. dividing the capital into “water intake and treatment related capital,” “water distribution related capital” and “other capital” for specifying the effects of a water network to the returns to scale,
3. adopting quality-graded water volume as the output of the production function.
The result of estimation with the improved production function does not indicate positive returns to scale. Three improvements applied in this paper could be effective implications to analyze the recent discussions on inter-city joint operations or privatization of the public water industry, because factors should focus on these topics that vary within a city and within a water distribution network.
JEF Classification: D24, L32
