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Water pricing reform analysis: alternative scenarios

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  • Alla Fridman

Abstract

This paper compares alternative transition paths to efficient water pricing. The analysis is based on representative agent model, where two sources of water supply exist: exhaustible groundwater stock and a renewable substitute. Two alternative water pricing reforms are considered: gradual tariff increase and multipart pricing with first block sold at the initial pre-reform tariff and additional water sold at higher prices (block pricing reform). Under block pricing reform, the amount of water offered at low price gradually diminishes. The results of comparative analysis prove that under the same reform time horizon block pricing is preferred to the gradual tariff increase.

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  • Alla Fridman, 2015. "Water pricing reform analysis: alternative scenarios," Journal of Economic Policy Reform, Taylor and Francis Journals, vol. 18(3), pages 258-266, July.
    • Handle: RePEc:taf:jecprf:v:18:y:2015:i:3:p:258-266
    DOI: 10.1080/17487870.2015.1057510
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    Cited by:

    1. Caravaggio, Andrea & De Cesare, Luigi & Di Liddo, Andrea, 2024. "Socio-economic determinants of pricing water for domestic use: A comparison of blocks and linear tariffs," Socio-Economic Planning Sciences, Elsevier, vol. 93(C).

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