Nowadays, a little more than half of French municipalities delegate the management of water services to private companies. The effect of the management system on the service cost and the differences observed between private and public management are topical questions. Our assessment of the impact of the delegation system on the prices of drinking water services in France shows that the operating conditions of these services help explain the existing differences between the average prices charged by private and public services in 1998. Our results demonstrate that municipalities facing difficult operating conditions are more likely to choose a private management.


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