Simulating the Impact of Pricing Policies on Residential Water Demand: A Southern France Case Study

Jean-Daniel Rinaudo (), Noémie Neverre and Marielle Montginoul

Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), 2012, vol. 26, issue 7, 2057-2068

Abstract: The case study conducted in this paper looks at residential water pricing from three different points of view. It first describes existing urban water-pricing practices in Southern France, emphasizing that pricing is not yet being used as a tool for providing economic incentives to save water. It then looks at the observed impact of pricing on water consumption, through an econometric analysis of a cross-sectional data set. The analysis suggests that demand, with an estimated price elasticity of −0.2, is not yet very responsive to price variation. A regional water model (300 municipalities) is then developed and used to simulate the potential impact of various water-pricing scenarios on aggregate water demand, aggregate water sales revenue, and consumer surpluses. The results illustrate the trade-offs that have to be made between the search for environmental effectiveness, cost recovery, and equity when implementing complex water-pricing structures such as block rates or seasonal water pricing. Copyright Springer Science+Business Media B.V. 2012

Keywords: Demand elasticity; France; Water pricing; Residential water demand; Simulation (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (23)

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DOI: 10.1007/s11269-012-9998-z

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