Equitable and Efficient systems of water utility charges in the face of a changing water supply mix
Maksym Polyakov () and
Md Sayed Iftekhar
No 264780, Working Papers from University of Western Australia, School of Agricultural and Resource Economics
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)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:uwauwp:264780
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