Charges for Water and Access: What Explains the Differences Among West Virginian Municipalities?

Elham Erfanian and Alan R. Collins
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Elham Erfanian: Resource Economics and Management, Davis College of Agriculture, Natural Resources, and Design, West Virginia University, Regional Research Institute, West Virginia University, Morgantown, West Virginia USA
Alan R. Collins: Resource Economics and Management, Davis College of Agriculture, Natural Resources, and Design, West Virginia University, Regional Research Institute, West Virginia University, Morgantown, West Virginia USA

Water Economics and Policy (WEP), 2018, vol. 04, issue 04, 1-27

Abstract: Examining both spatial and non-spatial econometric analyses with a dataset of 125 municipal water utilities, we investigate utility cost and community factors that explain variation in residential user charges and monthly access charges for water. The results of water charges model are consistent with the theory of water cost determination as water source, debt, and economies of size plus scale influence residential consumer charges for water. Both models (water charges and minimum monthly access) displayed positive spillover effects, although the only variable in either model with a significant indirect effect is water charges on minimum monthly access charges. Based upon model results, ground water use by utilities lowers water charges and is estimated to save residential customers in West Virginia over $3.6 million annually. West Virginia households typically pay far below the OECD standard of 3 to 5% of household income for municipal water, which may explain why socioeconomic factors do not influence minimum monthly charges for access.

Keywords: Residential water charges; social equity; municipal utilities; spatial econometrics (search for similar items in EconPapers)
Date: 2018
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DOI: 10.1142/S2382624X18500170

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