This paper proposes the use of directional distance functions and Data Envelopment Analysis techniques to assess technical efficiency in the provision of the different stages of the urban water cycle in Andalusia, a Southern European region. Evaluating performance in the management of specific stages of the urban water cycle provides utility managers and regulating authorities with relevant information that may not be detected by more conventional approaches based on assessing performance at utility level. We find that Andalusian water and sewage utilities could achieve significant increases in the volume of water delivered without diminishing the output of their other services and using the same quantities of inputs. Potential increases are also important for the volume of sewage collected, thus entailing significant environmental benefits in a territory where water scarcity has seen the efficient management of this natural resource become a pressing obligation.
Keywords: Data envelopment analysis, Directional distance functions, Stage-specific technical efficiency, Urban water cycle, Water and sewage utilities