Factors Impacting Technical Efficiency in Mexican WUOs: A Dea with a Spatial Component

Urbanization is creating an increasing number of challenges for efficient water management in cities with climate change. The present study investigates the technical efficiency of 49 Water Utility Organizations (WUOs) through a combined Data Envelopment Analysis (DEA) and Tobit Model approach. The DEA assesses the relative efficiency of each WUO based on resource use and cost inputs for volume and population outcomes of drinking water production and distribution. Ultimately, the Tobit Model analyses the effect of location on efficiency. The results show an average efficiency of 0.73 under CRS and 0.82 under VRS, indicating that several WUOs could significantly reduce resource use while maintaining output. While the Tobit analysis does not identify a statistically significant effect of geography on efficiency, regional influences such as population density and resource availability may still impact WUO performance. The contribution of this study will be towards understanding the efficiency of water management in Mexico, identifying areas for improvement and paving the way for future research on the determinants of efficiency in the sector.