Pipes, Taps and Vendors: Managing and Regulating the Unconnected Water Market

Georg Meran, Markus Siehlow and Christian von Hirschhausen

VfS Annual Conference 2018 (Freiburg, Breisgau): Digital Economy from Verein für Socialpolitik / German Economic Association

Abstract: Against the background of the human rights to water and the SDG No. 6, vendors play a pivotal role for an IWRM-based water supply system in the future. With the help of a micro-economic model, an optimal modal split is derived, the result of which is that not all households should be served by the pipe-based municipal supply. Instead, the non-connected households should be served by non-mobile or mobile vendors. Furthermore, we analyze different structures in the unconnected market. If vendors compete against each other, the optimal modal split can be replicated. If vendors form a cartel, market interventions, such as a cost related zonal price cap or a subsidizing strategy, are required for preventing the abuse of market power by the vendors.

Keywords: Production; Pricing; Market Structure; Economics of Regulation; Water; Size and Spatial Distributions of Regional Economic Activity (search for similar items in EconPapers)
JEL-codes: L11 L51 Q25 R12 (search for similar items in EconPapers)
Date: 2018
New Economics Papers: this item is included in nep-com and nep-reg
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc18:181584

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