Is the price of water for residential use related to provider ownership? Empirical evidence from Spain

This paper assesses the relationship between provider ownership and the price of water for residential use set by 386 Southern Spanish municipalities. Our main contribution to the previous literature is that we go much further than merely distinguishing between private and public ownership. First, we find that prices are lower when the urban water service is directly provided by town councils. Second, when water services are contracted out to external companies, the prices set by public utilities are higher than the prices of private utilities due to larger fixed quotas. Finally, water prices are also higher when the provision of the service has been privatised to an institutionalised public-private partnership compared to contractual public-private partnerships. ► This paper assesses the relationship between ownership and the price of water for residential use. ► Water prices are lower when the urban water service is provided in-house. ► When the urban water service is contracted-out, prices are higher in public utilities. ► Institutionalised PPPs set higher prices for water than contractual PPPs.