Water scarcity reduces the efficiency of the manufacturing industry in the valley of Mexico Basin: DEA-based two-stage efficiency analysis

ABSTRACT

This study analysed the impact of a series of socioeconomic variables on the efficiency of production processes used by different economic units belonging to the manufacturing industry in a hydrological basin with water scarcity problems. The main finding is that the economic units that used water from overexploited aquifers had lower efficiency scores than those that used water from non-exploited aquifers. Thus, the design of public policies for this sector, which is highly dependent on this natural resource, should take into account that actions to conserve water supply sources greatly affect the efficiency of the manufacturing industry.

KEYWORDS:

• Manufacturing industry
• efficiency
• water
• shortage

JEL codes:

• L6
• L25
• Q25
• Q55

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

This article was prepared with the financial support of the Valley of Mexico Basin’s Water and Economic Model Project, as part of the “Programa de Cátedras CONACYT” [Nº 1812].