Evaluating the Sustainability of Water and Sanitation Services: A Comparative Analysis of Methodological Approaches

ABSTRACT Benchmarking the sustainability of water utilities (WUs) in the provision of water and sanitation services is essential for addressing global sustainability goals. This study proposes a water utility sustainability index (WUSI), which was estimated for a sample of 29 WUs in Chile. To evaluate the impact of weighting methodologies on sustainability assessments, two approaches were applied: the benefit of doubt (BoD) method and the analytic hierarchy process (AHP). The results indicate that the average WUSI score under the BoD method was 0.987, with 55.17% of WUs achieving the maximum score of 1.0, whereas the AHP approach yielded a lower mean score of 0.551, with the highest‐performing WU reaching 0.737. This difference arises from the fact that the weights assigned to the indicators comprising the WUSI under the BoD approach are endogenously optimized to maximize the composite index for each WU, leading to the suppression of poor‐performing indicators. In addition, the BoD method exhibited lower variance (SD = 0.035) compared to AHP (SD = 0.095), suggesting a tendency to overestimate sustainability. The ranking of WUs also varied significantly depending on the weighting methodology used. The study revealed that utility size and geographical location influence sustainability outcomes. The significant discrepancies in WUSI scores based on the weighting methodology highlight the need for regulators to adopt a hybrid approach, combining objective, data‐driven methods with expert and stakeholder input to ensure more balanced and contextually relevant sustainability assessments.