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The paradox of water pricing: dichotomies, dilemmas, and decisions

Author

Listed:
  • R Quentin Grafton
  • Long Chu
  • Paul Wyrwoll

Abstract

We deliver a public policy perspective on the dichotomies, dilemmas, and decisions of water pricing. First, the dichotomies between price and value, and costs, are defined to explain the paradox of water pricing: the price of water almost never equals its value and rarely covers its cost. Second, the dilemmas of water pricing are highlighted across efficiency and equity, objectives for water pricing, and the instruments available to decision-makers. Third, the challenges of decision-making are evaluated and illustrated in relation to water pricing. Fourth, an adaptive process is provided that includes participatory assessment of risks and options to guide water-pricing decision-making.

Suggested Citation

  • R Quentin Grafton & Long Chu & Paul Wyrwoll, 2020. "The paradox of water pricing: dichotomies, dilemmas, and decisions," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 36(1), pages 86-107.
    • Handle: RePEc:oup:oxford:v:36:y:2020:i:1:p:86-107.
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    File URL: http://hdl.handle.net/10.1093/oxrep/grz030
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    Cited by:

    1. Chu, Long & Grafton, R.Quentin, 2020. "Water pricing and the value-add of irrigation water in Vietnam: Insights from a crop choice model fitted to a national household survey," Agricultural Water Management, Elsevier, vol. 228(C).
    2. Lucia Cattani & Paolo Cattani & Anna Magrini, 2021. "Photovoltaic Cleaning Optimization: A Simplified Theoretical Approach for Air to Water Generator (AWG) System Employment," Energies, MDPI, vol. 14(14), pages 1-17, July.
    3. Henrietta E. M. George-Williams & Dexter V. L. Hunt & Christopher D. F. Rogers, 2024. "Sustainable Water Infrastructure: Visions and Options for Sub-Saharan Africa," Sustainability, MDPI, vol. 16(4), pages 1-30, February.
    4. Pérez, María & Libra, Jesse & Machado, Kleber & Serebrisky, Tomás & Solís, Ben, 2022. "Water Bill Perception in Brazil: Do Households Get It Right?," EconStor Preprints 264986, ZBW - Leibniz Information Centre for Economics.
    5. Edwards, Eric & Sutherland, Sara A. & Thayer, Anastasia W., 2023. "Teaching Price Elasticity of Demand and Marginal Analysis using Household Water Pricing," Applied Economics Teaching Resources (AETR), Agricultural and Applied Economics Association, vol. 5(3), September.
    6. Brandli Stitzel & Cynthia L. Rogers, 2022. "Residential Water Demand Under Increasing Block Rate Structure: Conservation Conundrum?," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 36(1), pages 203-218, January.
    7. Juhee Lee & Mehdi Nemati & Ariel Dinar, 2022. "Historical trends of residential water use in California: Effects of droughts and conservation policies," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 44(1), pages 511-530, March.
    8. María Ángeles García-Valiñas & Sara Suárez-Fernández, 2022. "Are Economic Tools Useful to Manage Residential Water Demand? A Review of Old Issues and Emerging Topics," Post-Print hal-04067487, HAL.
    9. Alemken Jegnie & James Fogarty & Sayed Iftekhar, 2023. "Urban Residential Water Demand and Household Size: A Robust Meta‐Regression Analysis," The Economic Record, The Economic Society of Australia, vol. 99(326), pages 436-453, September.
    10. Pérez-Urdiales, María & Libra, Jesse M. & Machado, Kleber B. & Serebrisky, Tomás & Sosa, Ben Solís, 2024. "Household water bill perception in Brazil," Utilities Policy, Elsevier, vol. 87(C).
    11. Agnieszka Bus & Anna Szelągowska, 2021. "Green Water from Green Roofs—The Ecological and Economic Effects," Sustainability, MDPI, vol. 13(4), pages 1-14, February.
    12. Wade, Christopher M. & Baker, Justin S. & Van Houtven, George & Cai, Yongxia & Lord, Benjamin & Castellanos, Edwin & Leiva, Benjamín & Fuentes, Gabriela & Alfaro, Gabriela & Kondash, AJ & Henry, Candi, 2022. "Opportunities and spatial hotspots for irrigation expansion in Guatemala to support development goals in the food-energy-water nexus," Agricultural Water Management, Elsevier, vol. 267(C).

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