| Abstract: | ABSTRACTS The post-privatisation structure of the UK water industry involves the separation of environmental services from other outputs previously produced under an integrated system by the publicly-owned water authorities. This paper examines the extent to which the integrated authorities benefitted from joint production. Estimating a dynamic multi-product cost function from pooled cross-section, time-series quality adjusted data drawn from the accounts of the water authorities for the period 1979/80–1987/88, prior to privatisation, significant elements of joint production are found. Divestiture of the industry, arguably justified on other criteria, implies the loss of substantial areas of cost complimentary. |
