1. REF 13 IMPACT CASE: RESEARCH INTO EFFICIENCY AND PRODUCTIVITY ANALYSIS Emmanuel Thanassoulis David Saal

2. SUMMARY Two domains in which research at ABS into efficiency and productivity analysis methods and applications has had an impact are: - Assessment and use of value-added in secondary education in Portugal and - Regulation of UK water utilities The impact on secondary education in Portugal relates to research by Thanassoulis The impact on regulation of UK water relates to complementing research by Saal and Thanassoulis.

3. Research underpinning the impact on secondary education Thanassoulis developed a DEA-based method for estimating the component of academic under-attainment a pupil may recover through remedial action at nested hierarchical levels involved in his/her education: (e.g.by the pupil within his/her class, by the teacher within the school, by the school within the local education authority, etc.) The method reveals other information useful for setting targets for a pupil: e.g role model pupils, teachers, schools etc or any evidence of differential school effectiveness (e.g. by academic ability of pupil, gender etc) The research was post 1999.

4. Research underpinning the impact on regulation of UK water utilities: Saal Methodology and investigation of economies of scope and scale in the UK water industry. Methodology and investigation of the determinants of profitability growth after privatisation of UK water utilities. Methodology for allowing for changes in water quality in the assessment of cost and productivity performance in the UK water industry. Thanassoulis Methodology for assessing comparative productivity change across time within and across UK water companies. Investigation of the impact of regulatory policy on the productivity of UK water companies.

5. References to demonstrate the quality of the underpinning research Education impact E. Thanassoulis, (1999) Setting Achievement Targets for School Children, Education Economics, Vol 7, No. 2, pp. 101 – 119. DOI:10.1080/09645299900000010 – 2* Maria da Conceição A. Silva Portela and Emmanuel Thanassoulis, (2001) Decomposing school and school type efficiencies, European Journal of Operational Research Vol. 132/2 pp. 357-373 – ¾* De Witte K. Thanassoulis E. Simpson, Battisti, Charles-Worth May (2010) Assessing pupil and school performance by non- parametric and parametric techniques Journal of the Operational Research Society, Vol. 61, 1224 –1237 –3*

6. References to demonstrate the quality of the underpinning research UK water regulation P. Arocena D.S. Saal, and Coelli (2012) Vertical and Horizontal Scope Economies in the Regulated US Electricity Power Industry, Journal of Industrial Economics 60(3) pp 434-66. DOI: 10.1111/j.1467-6451.2012.00486 – 3* D.S. Saal and D. Parker (2001) Productivity and Price Performance in the Privatized Water and Sewerage companies of England and Wales, Journal of Regulatory Economics 20(1) pp. 61–90. DOI: 10.1023/A:1011162214995 – 2* Maria C. A. S. Portela, Emmanuel Thanassoulis, Alan Horncastle, Tobias Maugg (2011) Productivity change in the Water Industry in England and Wales: Application of the Meta-Malmquist Index, Journal of the Operational Research Society, Vol. 62, pp 2173- 2188 – 3*

7. Impact on value-added in secondary education in Portugal The impact on the assessment of value-added in Portugal is through Dr Portela Associate Professor at the Catholic University of Porto in Portugal. Her PhD was supervised at ABS by Thanassoulis during 2000-2003. She set up and runs the analysis of data to assess the components of pupil under-attainment by subject and by nested subset of pupils in 50 secondary schools in Portugal Over the years over 50000 pupils have been the subject of these assessments. The impact is delivered in 3 formats: -dissemination of a report to schools on the findings; - workshops to which the schools send delegates to discuss the findings and their implementation; - staff from the foundation funding the project and from the Catholic University of Porto (Portela’s institution) visiting schools to advise on ways to improve performance. (We may be able to add what sample schools do differently because of the analysis and feedback)

8. Impact on the Regulation of UK Water Impact on the debate with regard to introduction of competition and vertical separation in the water industry. This is largely through a Severn Trent Water funded research project on the potential impact of water industry restructuring on industry costs. The findings have impacted the reform proposals contained in the Draft Water Bill currently (2012) before Parliament; Impact on efficiency assessment techniques to be used for water regulation, both by OFWAT in England and Wales and for the regulation of Scottish Water by the Water Industry Commission for Scotland Impact on the debate on future regulation of English and Welsh water through the participation by Saal and Thanassoulis on a panel of Experts consulted by the regulator OFWAT during 200?- 2013

9. Secondary education in Portugal - Sample school statements on how they have used the assessment findings - Staff at the Catholic University of Porto on interactions with schools under the value-added assessments programme -Press clippings on the programme of assessments Sources to corroborate the impact

10. Regulation of UK water - OFWAT website and reports such as - Saal panel data report - Saal work cited by Ofwat's review of the evidence base for retail competition and separation - Ofwat’s Review of Competition in the Water and Sewerage Industries – May 2008 - Letter from Severn Trent Water on Saal’s project that they funded on economies of scope and its impact on the debate on regulation - Letter from the Regulator of Scottish water companies on analyses carried out on their behalf by Saal and their impact Sources to corroborate the impact

11. Thank you! e.thanassoulis@aston.ac.uk 11