Estache and Rossi estimate a stochastic costs frontier for a sample of Asian and Pacific water companies, comparing the performance of public and privatized companies based on detailed firm-specific information published by the Asian Development Bank in 1997. They find private operators of water companies to be more efficient than public operators. Costs in concessioned companies tend to be significantly lower than those in public companies. They show that rankings based on standard indicators are not always very consistent. Productivity indicators recognize simple input-output relations, such as the number of workers per client or connection.
Frontiers recognize the more complex nature of interactions between inputs and outputs.
Production frontiers reveal technical relations between firms' inputs and outputs and provide a useful backup when cost frontiers are difficult to assess for lack of data. The full report is available in PDF format.