Users’ Satisfaction of Public Utility Services – Multivariate System Analysis
This research develops a multivariate system framework for assessing user satisfaction of public water utility organization in a developing country and predicts quality, quantity and overall user satisfaction for policy initiatives. The model framework is applied to the data collected by Public Affairs Centre (PAC) based on the Citizen Report Card approach pioneered by it. Wald test confirms that there exits cross equation correlation across quality, quantity and overall users’ satisfaction dimensions. Based on the system model, the study identifies statistically significant factors that explain users’ loyalty to express satisfaction and voice to express dissatisfaction of users. Policy initiatives are proposed on key factors to reduce voice factors set so that the service provider could improve its service delivery. The system model correctly predicts 85% of satisfied customers across quality, quantity and overall satisfaction dimensions.
Keywords: Multivariate, Logit, Discrete choice Model, Public Sector Utility service provider
Journal of Water Resources Planning and Management 134 (2), 119–128.
Aggarwa, V.K., Keohane, R.O. and Yoffie, D.B., 1987. 'Dynamics of Negotiated Protectionism'. American Political Science Review, (81).
Agresti, A. 2013. Categorical Data Analysis. 3rd ed. New York: Wiley.
Anderson, E.W.; Fornell, C. and Lehmann, D. R., 1994. Customer Satisfaction, Market Share, and Profitability. Journal of Marketing, 58, pp. 53-66.
Andreassen, T.W. and Lindestad, B., 1998. ‘The Impact of Corporate Image in the Formation of Customer Loyalty’, Journal of Service Research, 1 (1).
Annoni, P. 2007. “Different Ranking Methods: Potentialities and Pitfalls for the Case of European
Opinion Poll.” Environmental and Ecological Statistics 14: 453–471.
Annoni, P., and R. Brüggemann. 2009. “Exploring Partial Order of European Countries.” Social
Indicators Research 92: 471–487.
Ansolabehere, S., and D. M. Konisky. 2009. “Public Attitudes toward Construction of NewPower Plants.” Public Opinion Quarterly 73 (3): 566–577.
Bacchiocchi, E., M. Florio, and M. Gambaro. 2011. “Telecom Reforms in the EU: Prices and Consumers’ Satisfaction.” Telecommunications Policy 35: 382–396.
Baker, B. and Tremolet, S., 2003. Regulation of Quality: Let competing Firms Offer a Mix of Price and Quality Options. Washington, DC: The WorldBank.
Bakker, K.J. 2010. Privatizing Water: Governance Failure and the World’s Urban Water Crisis. Ithaca, NY: Cornell University Press.
Ben Akiva Moshe and Lerman R. Steven, “Discrete Choice Analysis” The MIT Press, Cambridge, Massachusetts 02142, 1985, ISBN 0-262—02217-6.
Brudney, J.R. and England, R.E., 1982. ‘Urban Policy Making and Subjective Service Evaluations: Are They Compatible?’, Public Administration Review, 42, pp.127-35.
Bougadis, J., Adamowski, K., Diduch, R., 2005. Short-term municipal water demand forecasting.
Hydrological Processes 19 (1), 137–148.
Buttle, F., 1996. Service Quality: Review, Critique, research Agenda. European Journal of Marketing, 30(1), 8-31.
Cameron, A. C., and P. K. Trivedi. 2005. Microeconometrics. Methods and Applications. Cambridge: Cambridge University Press.
Chubb, J.E. and Moe, T.M., 1988. Politics, Market, and the Organisation of Schools. American Political Science Review, 82, pp. 1065-87.
Clarke, R.G. and Wallsten, S., 2003. "Universal Service: Empirical Evidence on the Provision of Infrastructure to Rural and Poor Urban Consumers,". In: BROOK P.J. AND IRWIN, T.C., ed, Infrastructure for Poor People: Public Policy for PrivateProvision. Washington, D.C.: World Bank, pp. 21-76.
Clifton, J., and D. D. Díaz-Fuentes. 2010. “Evaluating EU Policies on Public Services: A Citizens’ Perspective.” Annals of Public and Cooperative Economics 81 (2): 281–311.
Clifton, J., D. Díaz-Fuentes, M. Fernández-Gutierrez. Forthcoming. “The Impact of Socioeconomic Background on Satisfaction:Evidence for Policy-makers.”Journal of Regulatory Economics. doi:10.1007/s11149-014-9251-1.
Clifton, J., F. Comín, and D. Díaz-Fuentes. 2006. “Privatizing Public Enterprises in the European Union 1960–2002: Ideological, Pragmatic, Inevitable?” Journal of European Public Policy 13 (5): 736–756.
Conway, P., and G. Nicoletti. 2006. Product Market Regulation in Non-manufacturing Sectors in
Cronin, J. and Taylor, S.A., 1994. ‘SERVPERF Versus SERVQUAL: Reconciling Performance - Based and Perceptions-Minus-Expectations Measurement of Service Quality’, Journal of Marketing, 58 (1), pp.125-131.
Cronin, J.J. and Taylor, S.A., 1992. Measuring Service Quality: A Reexamination and Extension. Journal of Marketing, 56, 56-68.
CSIRO 2012. Urban Water Research Theme. Available from: http://www.csiro.au/Organisation-
[Accessed 8 October 2012].
Das, B., Chan, E.K., Visoth, C., Pangare, G. and Simpson, R., 2010. Sharing the Reform Process: Learning from the Phnom Penh Water Supply Authority(PPWSA). Gland, Switzerland: IUCN.
Deichmann, U. and Lall, S.V., 2003. Are You Satisfied? Citizen Feedback and Delivery of Urban Services. Urban Development Policy Research Working Paper.Available at www.econ.worldbank.org/resource.
European Commission. 2006. Special Eurobarometer: Services of General Interest. Brussels:
European Commission. 2010. “Behavioral Economics, So What: Should Policy Makers Care?” Material from the International Conference Organized by DG Health and Consumers, Brussels, November 22. Accessed March 14, 2014. http://ec.europa.eu/consumers/conferences/behavioural_economics2/links_en.htm
European Opinion Research Group. 2002. Eurobarometer 58 – Special Edition. Consumers’ Opinions about Services of General Interest. Brussels: European Opinion Research Group.
Ferrari, P. A., P. Annoni, and G. Manzi. 2010. “Evaluation and Comparison of European Countries: Public Opinion on Services.” Quality & Quantity 44: 1191–1205.
Ferrari, P. A., and A. Barbiero. 2011. “Nonlinear Principal Component Analysis.” In Modern Analysis of Customer Surveys: With Applications Using R, edited by R. S. Kenett and S. Salini, 333–356. Chichester: Wiley.
Ferrari, P. A., Laura Pagani, and C. V. Fiorio. 2011. “A Two-step Approach to Analyze Satisfaction
Data.” Social Indicators Research 104: 545–554.
Fiorio, C. V., and M. Florio. 2011. “Would You Say That the Price You Pay for Electricity is Fair? Consumers’ Satisfaction and Utility Reforms in the EU15.” Energy Economics 33: 178–187.
Fiorio, C. V., M. Florio, S. Salini, and P. A. Ferrari. 2007. European Consumers’ Attitudes on Services of General Interest: Accessibility, Price and Quality. Working Paper 2007-04. Milan: DEAS, University of Milan.
Freeman, R.B. and Medoff, J.L., 1984. What Do Unions Do? New York: Basic Books.
Frontier Economics 2008. Urban Water Markets: A Final Report Prepared for the Joint Steering Committee for
Water Sensitive Cities (JSCWSC), Melbourne: Frontier Economics Pty. Ltd.
Fuller, J. and Matzler, K. (2008), “Customer delight and market segmentation: An application of the three?factor theory of customer satisfaction on life style groups”, Tourism Management, Vol. 29, No. 1, pp. 116?126.
Gehlbach, S., 2006. A Formal Model of Exit and Voice. Rationality and Society, 18(4), pp. 395.
Gershuny, J., Bittman, M. and Brice, J., 2005. Exit, Voice and suffering: Do Couples Adapt To Changing Employment Pattern? Journal of Marriage And family,67, pp. 656-65.
Gifi, A. 1990. Nonlinear Multivariate Analysis. New York: Wiley.
Gray, R., P. Campanelli, K. Deepchand, and P. Prescott-Clarke. 1996. “Exploring Survey Nonresponse: The Effect of Attrition on a Follow-up of the 1984–85.” Journal of the Royal Statistical Society. Series D (the Statistician) 45 (2): 163–183.
Gronroos, C., 1983. ‘An Applied Service Marketing Theory’, European Journal of Marketing, 47, p.36.
HALL, D., 2006. Water and Electricity in Nigeria. Public Service International Research Unit (PSIRU).
Hand, D. 2012. “Foreword.” In Modern Analysis of Customer Surveys: With Applications Using R, edited by R. S. Kenett and S. Salini, xvii–xviii. Chichester: Wiley.
Hill, N. and Roche, G.A.A., R., 2007. Customer Satisfaction: The Customer Experience through the Customer's Eyes. London: Cogent Publishing.
Hirschman, A. O. 1970. Exit, Voice and Loyalty. Responses to Decline in Firms, Organizations, and States. Cambridge, MA: Harvard University Press.
Hirschman, A.O., 1978. Exit, Voice and the State. World Politics, 31, pp. 90-107.
Hirschman, A.O., 1993. Exit, Voice and the Fate of the German Democratic Republic: An Essay in Conceptual History. World Politics, 45(173-202),.
Ho, S. S., V. H.-H. Chen, and C. C. Sim. 2013. “The Spiral of Silence: Examining How Cultural Predispositions, News Attention, and Opinion Congruency Relate to Opinion Expression.” Asian Journal of Communication 23 (2): 113–134.
IUCN, 2010. Sharing the Reform Process, Learning from the Phnom Penh Water Supply Authority, International Union for Conservation of Nature and NaturalResources, Bangkok, Thailand.
Jain, A., Ormsbee, L., 2002. Short-term water demand forecast modeling techniques - conventional
methods versus AI. Journal of the American Water Resources Association 94 (7), 64–72.
Jain, A., Varshney, A., Joshi, U., 2001. Short-term water demand forecast modeling at IIT Kanpur
using artificial neural networks. Water Resources Management 15 (5), 299–321.
Jamison, M.A.; Berg, V.S. and Gasmi, F. and Tavara, J.I., 2004. Annotated Reading List for Body of Knowledge on the Regulation of Utility Infrastructure and Services. Florida, USA: Public Utility Research Centre, University of Florida.
Jilke, S., and S. Van De Walle. 2013. “Two Track Public Services? Citizens’ Voice Behaviour towards Liberalized Services in the EU15.” Public Management Review 15 (4): 465–476.
Jöreskog, K. G. 1970. “A General Method for Analysis of Covariance Structure.” Biometrika 57 (2): 239–251.
Katz, E., 1997. The Itra-Household Economics of Voice and Exit. FeministEconomics, 3(25-46).
Kaufmann, L. and Lowry, M.N., 2002. Price Cap Regulation of Power Distribution. Madison: Pacific Economics Group.
Kendall, S.D., 2006. Customer Service from the Customer's Perspective. In: L. FOGLI, ed, Customer Service Delivery: Research and Best Practices. 1st ed. San Francisco, USA: John Wiley and Sons, Inc.
Kenett, R. S., and S. Salini. 2012. Modern Analysis of Customer Surveys: With Applications Using R. Chichester: Wiley.
Khatri, K.B. AND Vairavamoorthy, K., 2007. Challenges for Urban Water Supply and Sanitation in the Developing Countries, Discussion Paper on Urbanisation, Delft, Netherlands.
Kim, Y. and Kang, J., 1995. Consumer Perception of Shopping Costs and its Relationship with Retail Trends. Journal of Shopping Research Centre, 2(1), pp. 27-61.
Latin, D.D., 1998. Identity in Formation: The Russian-Speaking Population in the Near Abroad. Ithaca, New York: Cornell University Press.
León, C. J., J. E. Araña, and J. De León. 2013. “Correcting for Scale Perception Bias in Measuring Corruption: An Application to Chile and Spain.” Social Indicators Research 114: 977–995.
Lowery, D., Hoogland DeHoog. R. and Lyons, W.E., 1992. ‘Citizenship in the Empowered Locality: An Elaboration, A Critique and A Partial Test’, Urban AffairsQuarterly, 28 (3), pp.69-103.
Likert, R. 1932. “A Technique for the Measurement of Attitudes.” Archives of Psychology 140:595–639. Journal of Economic Policy Reform 251
Lodge, J., and Sarikakis, K. 2011. “Communicating Europe: Steps towards the Public Sphere?” In Communication, Mediation and Culture in the Making of Europe, edited by J. Lodge and K. Sarikakis, 27–60. Rome: Il Mulino.
Mannetje, A., A. Eng, J. Douwes, L. Ellison-Loschmann, D. McLean, and N. Pearce. 2011. “Determinants of Non-response in an Occupational Exposure and Health Survey in New Zealand.” Australian and New Zealand Journal of Public Health 35 (3): 256–263.
Manzi, G., and P. A. Ferrari. 2014. “Statistical Methods for Evaluating Satisfaction with Public Services.” CIRIEC Working Paper. Liège: CIRIEC,
McFadden, D., A. C. Bemmaor, F. G. Caro, J. Dominitz, B. Jun, A. Lewbel, R. L. Matzkin, et al. 2005. “Statistical Analysis of Choice Experiments and Surveys.” Marketing Letters 16 (3–4): 183–196.
McIntosh, A.C., 2003. Asian Water Supplies, Reaching the Urban Poor, Asian Development Bank, IWA, London. MNI, 2006. Accelerating Water Supply and Sanitation for the Urban Poor, EastAfrican Regional Conference 2006.
Meyrick Associates, 2002. Electricity Service Quality Incentives Scoping Paper. Prepared for: Queensland Competition Authority, Australia.
Michailidis, G., and J. De Leeuw. 1998. “The Gifi System of Descriptive Multivariate Analysis.” Statistical Science 13: 307–336.
Myers, R. and Lacey, R., 1996. ‘Consumer Satisfaction, Performance and Accountability in the Public Sector’, International Review of Administrative Science, 62 (3), pp.331-350.
Myhal, G.C., Kang, J. and Murphy, J.A., 2008. Retaining Customers through Relationship Quality: A Service Business Marketing Case. Journal of ServicesMarketing, 22(6), pp. 445-53.
National Water Commission 2012. Urban Water. http://nwc.gov.au/urban [Accessed 8 October 2012].
Noelle-Neumann, E. 1974. “The Spiral of Silence: A Theory of Public Opinion.” Journal of
Communication 24 (2): 4351.
O’Brien, R. M., and P. Homer. 1987. “Corrections for Coarsely Categorized Measures: LISREL’s
OECD Countries: Measurement and Highlights. OECD Economics Department Working Paper No. 530. Paris: OECD.
OfWat 2012. Future Challenges. Available from: http://www.ofwat.gov.uk/future [Accessed 8 October 2012].
Omonona, B. T. (2009) Knowledge review on poverty and rural development in Nigeria. Strategy Support Program (NSSP) Background Paper. Washington,
Parasuraman, A. and Zeithaml, V.A., 2005. Understanding and Improving Service Quality: A Literature Review and Research Agenda. In: WEITZ, B. and WENSLEY, R. eds, Handbook of Marketing. London: Sage Publication, pp. 339-67.
Parasuraman, A. and Zeithaml, V. A. and Berry, L. L, 1994. Reassessment of Expectations as a Comparison Standard In Measuring Service Quality: Implications for Further Research. Journal of Marketing, 58, pp. 111-24.
Parasuraman, A. and Zeithaml, V. A. and Berry, L. L, 1988. SERVQUAL: A Multiple-item Scale for Measuring Customer Perceptions of Service Quality. Journalof Retailing, 64(1), 12-40.
Parasuraman, A. and Zeithaml, V. A. and Berry, L.L., 1985. A Conceptual Model of Service Quality and Its Implications for the Future. Journal of Marketing, 49.
Pfaff, S. and Kim, H., 2003. Exit-Voice Dynamics in Collective Action: An Analysis of Emigration And Protest in The East German Revolution. American Journal ofSociology, 109, pp. 401-44.
Polyserial and Polychoric Correlations.” Quality & Quantity 21 (4): 349–360.
Productivity Commission 2011. Australia’s Urban Water Sector, Report No. 55, Final Inquiry Report,
Canberra. Available from: http://www.pc.gov.au/__data/assets/pdf_file/0017/113192/urban-watervolume1.
pdf [Accessed 8 October 2012].
Rahmqvist, M., and A. C. Bara. 2010. “Patient Characteristics and Quality Dimensions Related to Patient Satisfaction.” International Journal for Quality in Health Care 22 (2): 86–92.
Rasch, G. 1960. Probabilistic Models for Some Intelligence and Attainment Tests. Copenhagen: The University of Chicago Press.
Ramamurti, R., 1992. Why are Developing Countries Privatizing? Journal of International Business Studies, 23(2), pp. 225.
Renzetti, S. and Dupont, D., 2003. Ownership and Performance of Water Utilities (Comparison of US, UK and French Public Utilities). Greener ManagementInternational, 42, pp. 9 -19.
Riphahn, R. T., and O. Serfling. 2005. “Item Non-response on Income and Wealth Questions.” Empirical Economics 30: 521–538.
Rogowski, R., ed, 1998. Democracy, Capital, Skill, And Country Size: Effects of Asset Mobility And Regime Monopoly on The Odds of Democratic Rule. Princeton, NJ: Princeton University Press
Salini, S., and R. S. Kenett. 2009. “Bayesian Networks of Customer Satisfaction Survey Data.” Journal of Applied Statistics 36 (11): 1177–1189.
Schoppa, L.J., 2006. Race for The Exits. Ithaca, New York: Cornell University Press.
Shinde, V. R., Hirayama, N., Mugita, A., and Itoh, S., Revising the existing performance indicator system for small water utilities in Japan, UrbanWater Journal, DOI: 10.1080/1573062X.2012. 739628, 2012.
Sohail, M. and Cavill, S., 2006. Voice in Infrastructure Services. Water, Engineering and Development Centre (WEDC), Loughborough University.
Teas, R.K., 1993. Expectations, Performance Evaluation, and Consumers' Perceptions of Quality. Journal of Marketing, 57, 18-34.
Tenenhaus, M., E. V. Vinzi, Y. M. Chatelin, and C. Lauro. 2005. “PLS Path Modelling.” Computational
Statistics & Data Analysis 48: 159–205.
Thampi, G.K., 2005. Experiences with Citizen Report Cards in Bangalore, Community Voice as an Aid to Accountability, 20th August 2005
Tourangeau, R., and T. W. Smith. 1996. “Asking Sensitive Questions: The Impact of Data Collection
Mode, Question Format, and Question Context.” Public Opinion Quarterly 60: 275–304.
Uitto, J.I. and Biswas, A.K., eds. 2000. Water for Urban Areas: Challenges and Perspectives. United Nations:
United Nations 2012. Responding to the Urban Water Challenge. Available from:
http://www.un.org/en/development/desa/news/sustainable/water-challenge.html [Accessed 8 October 2012].
Wardman, M. 1988. “A Comparison of Revealed Preference and Stated Preference Models of
White, S.B., Fane, S.A., 2002. Designing cost effective water demand management programs in
Australia. Water Science & Technology 46 (6-7), 225–232.
WHO/UNICEF, 2006. Meeting the MDG Water and Sanitation Target: The Urban and Rural Challenge of the Decade. Switzerland: World HealthOrganization and UNICEF.
Withey, M.J. and Cooper, W.H., 1989. Predicting Exit, Voice, Loyalty, and Neglect. Administrative Science Quarterly, 34(4), pp. 521.
Witte, J.K., 2001. The Market Approach To Education: An Analysis of American's First Voucher Program. Princeton, NJ: Princeton University Press
Wold, H. 1982. “Systems under Indirect Observation Using PLS.” In A Second Generation of Multivariate Analysis: Methods, edited by C. Fornell, 325–347. New York: Praeger.
Zadek, S., Pruzan, P. and Evans, R., 1997. Building Corporate Accountability. London: Earthscan.
Zatti, A. 2012. “New Organizational Models in European Local Public Transport: From Myth to Reality.” Annals of Public and Cooperative Economics 83 (4): 533–559.
Zeithaml, V.A and Bitner, M.J., 2003. Service Marketing: Integrating Customer Focus across the Firm, NY: McGraw-Hill.
Zeithaml, V.A., Parasuraman, A. and Berry, L.L., 1990. Delivering Quality Service: Balancing Customer Perceptions and Expectation. New York: Free Press.
ZeithamlL, V., 1988. A Consumer’s Perceptions of Price, Quality, and Value, Journal of Marketing, 52 (3).