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Equitable and Efficient systems of water utility charges in the face of a changing water supply mix

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  • Fogarty, James
  • Polyakov, Maksym
  • Iftekhar, MD Sayed

Abstract

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.

Suggested Citation

  • Fogarty, James & Polyakov, Maksym & Iftekhar, MD Sayed, 2017. "Equitable and Efficient systems of water utility charges in the face of a changing water supply mix," Working Papers 264780, University of Western Australia, School of Agricultural and Resource Economics.
    • Handle: RePEc:ags:uwauwp:264780
    DOI: 10.22004/ag.econ.264780
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    References listed on IDEAS

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