Investment efficiency in the Italian water service industry: a benchmarking study using data envelopment analysis (DEA)

The paper presents a benchmarking study of the Italian water service industry using data envelopment analysis. Sample investigated in the study includes 38 optimal territorial areas (ATOs), where the ATO is a well circumscribed geographical area where the provision of integrated water services is considered efficient. Results of DEA implementation show that the average pure technical and scale efficiency are situated at 92.62% and 93.91%, respectively, while the average technical efficiencies score is 87.61%. Findings also support the idea that there might be an optimal size of ATOs which is associated to higher efficiency scores and that agglomeration economies are important in the provision of water integrated services. Large scale operations and ATO size are associated to lower efficiency rates.