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A fuzzy logic-based approach for progressive pricing of freshwater in Jordan

Ghada Altarawneh ()
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Ghada Altarawneh: Mutah University

Journal of Revenue and Pricing Management, 2021, vol. 20, issue 4, No 10, 480-489

Abstract: Abstract The current freshwater pricing in Jordan is based on Block Rate tariffs, with a flat rate and fixed price per-block, this pricing system has several drawbacks, including and not limited to the breach of equity principle, and is not progressive enough to penalize irresponsible consumers of water in a dry country like Jordan. This paper proposes an alternative pricing system using fuzzy logic; this system consists of 3 stages, input curves, which are based on the water consumption, output curves, which are based on the water prices per cubic meter, and logical rules to move inference from input to output. Our experimental results, based on simulated water bills, show that the proposed pricing system is flexible, provides fair sale prices to both customers and water suppliers, is more progressive, as it penalizes the larger consumers of water, rewards the smaller consumers of water, and increases the number of happy customers, and consequently, saves water by preventing irresponsible use. Therefore, we recommend the propose pricing system to be used for pricing water in Jordan.

Keywords: Water pricing; Value-based pricing; Water bill; Fuzzy logic (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1057/s41272-020-00266-y

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