Measuring the quality of service of water companies: A two-stage goal programming synthetic index proposal

Abstract

Quality of service (QS) is one of the most important parameters for evaluating the performance of water companies. It is a multidimensional concept that encompasses several performance indicators, with synthetic indicators that provide useful evaluation tools. Drinking water provision and wastewater treatment are basic services for which there is a series of minimum requirements that all water companies must meet. Under this premise, this study proposes a novel synthetic indicator to evaluate the QS of water companies in two stages. First, the non-compliance index was estimated, which provides information on the degree of non-compliance for essential indicators. Second, based on the goal programming approach, each water company’s strengths and weaknesses were computed to generate a QS index with rankings. The index was then tested empirically on a sample of 24 water companies in Chile based on 10 initial indicators (of which three are considered essential indicators). Overall, 37.5% of the water companies did not meet the thresholds delineated for the essential indicators. Moreover, only five water companies had a positive QS index (i.e., their strengths were greater than their weaknesses). A scenario analysis evaluated the impact of weight allocation on the QS of water companies and their ranking. The ranking of water companies varied depending on the weights allocated to the initial indicators, demonstrating the importance of delineating regulator preferences when assessing QS.