The aim of this study was to estimate the determinants of residential water demand for chief towns of every Italian province, in the period 2007–2009, using the linear mixed-effects model estimated with the restricted-maximum-likelihood method. Results confirmed that the applied tariff had a negative effect on residential water consumption and that it was a relevant driver of domestic water consumption. Moreover, income per capita had a positive effect on water consumption. Among measured climatic and geographical features, precipitation and altitude exerted a strongly significant negative effect on water consumption, while temperature did not influence water demand. Further, data show that small towns in terms of population served were characterized by lower levels of consumption. Water utilities ownership itself did not have a significant effect on water consumption but tariffs were significantly lower and residential water consumption was higher in towns where the water service was managed by publicly owned water utilities. However, further research is needed to gain a better understanding of the connection between ownership of water utilities and water prices and water consumption.

The relevance of wastewater treatment service has increased in recent years, since it has a significant impact on the natural environment. A treatment plant facilitates energy generation, the recovery of products from waste, and the reuse of wastewater for industrial and irrigation purposes. An indirect environmental effect is the high energy consumption for pumping water and for tank aeration. The objective of this research is to develop a tool for measuring the energy costs of wastewater treatment plants and identifying how they can be reduced. The method adopted is double-bootstrap data envelopment analysis. The results show that the variables with a significant influence on efficiency are the chemical oxygen demand concentration; plant capacity; rate of used capacity, which positively affects efficiency; weight of industrial customers, which exerts a negative impact; and aeration system, with a negative impact for turbines. This paper suggests the adoption of an effective control tool to monitor the costs drivers and energy expenditure of water utilities.

Efficiency improvement is one of three patterns a public utility should follow in order to get funds for investments realization. The other two are recourse to bank loans or to private equity and tariff increase. Efficiency can be improved, for example, by growth and vertical integration and may be conditioned by environmental variables, such as customer and output density. Prior studies into the effects of these variables on the efficiency of water utilities do not agree on certain points (e.g., scale and economies of scope) and rarely consider others (e.g., density economies). This article aims to contribute to the literature by analysing the efficiency of water utilities in Denmark, observing the effects of operational and environmental variables. The method is based on two-stage Data Envelopment Analysis (DEA) applied to 101 water utilities. We found that the efficiency of the water sector was not affected by the observed variables, whereas that of wastewater was improved by smaller firm size, vertical integration strategy, and higher population density.

Efficient water management is a priority in the European Union, since the operational efficiency of many water utilities is very low compared to best practice. Several countries are restructuring the water industry to save costs. Larger-scale operations and vertical integration are promoted to achieve scale and scope economies; however, the literature is not unanimous that such economies exist. There is also little evidence of the effect of customer density on costs. This article offers some insights into this matter, analysing the Danish water industry by a two-stage Data Envelopment Analysis approach to investigate the effects of size, scope and density in the wastewater industry. The results show that the Danish wastewater industry is positively affected by vertical integration and higher population density: firms that serve more than 100 person per km of sewer and combine water and wastewater services achieve better efficiency. Size does not have any significant influence on global efficiency, although technical pure efficiency decreases statistically with firm size.