Performance Appraisal of Water Utilities Using DEA Approach

This paper presents an introduction to the use of Data Envelopment Analysis (DEA) technique for assessing the relative performances of water supply utilities. The DEA is a non-parametric, linear programming technique that generates an efficiency frontier for the sample utilities and measures performances relative to the frontier. The paper details the technique and its applications, and discusses some of the input and output variables that can be employed for evaluating performances of the water utilities. The paper notes that some of the important variables often need omission, as relevant data is often not available with most utilities in the developing countries. This highlights the need for evolving mechanisms to collect, and make public, the data pertaining to significant indicators of performance; and to evolve standardized definitions of various performance indicators for reliable appraisal of water supply utilities.