Performance Benchmarking Analysis of Japanese Water Utilities

Although the Japanese water sector is economically and socially important, few empirical studies are available to help analysts and policy-makers understand the performance patterns in the industry. This study applies non-parametric methods to 5,538 observations on 1144 utilities that supplied drinking water between 2004 and 2007. With a comprehensive census of utilities, the present study controls for a number of factors affecting efficiency: region, prefecture, ownership/governance, water source, vertical integration (purchased water or integrated), peak factor, per capita consumption, customer density, water losses, monthly water charge, outsourcing, subsidies, gross prefecture product, and time. Thus, we are able to derive more comprehensive conclusions regarding efficiency patterns in Japan.