Sewer plant operating efficiency,patronage, and competition

Sewer treatment plants in New York State, US, are studied for efficiency and economies of scale. Substantial economies of scale are found. The degree of inefficiency for each plant is then computed and this inefficiency is related to the degree of market concentration in that county. The result found is that greater concentration induces a reduction in efficiency. This is argued to be consistent with the Tiebout Hypothesis. Copyright © 2004 John Wiley & Sons, Ltd.