Public-private partnerships and prices: Evidence from water distribution in France

Abstract

We use an original database of 5000 French local public authorities to explore the impact of organizational choice and performance as measured by consumer prices. In quantifying the impact of the choice of public-private partnerships (PPPs) on performance, we consider the related issue of the determinants of organizational choice. We estimate a switching regressions model to account for the endogeneity of organizational choice, and find that in our sample, (i) the choice by local public authorities to engage in a PPP is not random, and (ii) conditional on the choice of a PPP, consumer prices are significantly higher on average. © Springer 2006.