Equitable and Efficient systems of water utility charges in the face of a changing water supply mix

James Fogarty, Maksym Polyakov and Md Sayed Iftekhar

No 264780, Working Papers from University of Western Australia, School of Agricultural and Resource Economics

Abstract: In this research we argue that for jurisdictions where desalinated water has been introduced as a major supply source such that long run marginal cost is rising, marginal cost pricing is: (i) efficient; (ii) delivers revenue sufficiency; and (iii) is more equitable than traditional pricing approaches. To illustrate our result we compare outcomes under different pricing structures in Western Australia, a jurisdiction where desalinated water is responsible for almost half total potable water supply. We also show that a pure volumetric charge for wastewater services is more equitable than property value based charges or a uniform tariff. The results are based on analysis of water charges for over 700,000 individual households.

Keywords: Public; Economics (search for similar items in EconPapers)
Pages: 29
Date: 2017-11-09
New Economics Papers: this item is included in nep-agr
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Persistent link: https://EconPapers.repec.org/RePEc:ags:uwauwp:264780

DOI: 10.22004/ag.econ.264780

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