IDEAS home Printed from https://ideas.repec.org/p/ags/cfcp15/344377.html
   My bibliography  Save this paper

Policy Implications of Tariff Preferences in Rural Water Management: Insights from Chile

Author

Listed:
  • Fernández, Francisco J.
  • Vásquez-Lavín, Felipe
  • Rivera, Diego
  • Hernández, Francisco
  • Bopp, Carlos
  • Campos-Requena, Nélyda
  • Ponce, Roberto D.

Abstract

A tariff is a crucial tool for managing rural water supply services. It helps cover the costs of operation, maintenance, and repair, ensuring the sustainability of these services. Unfortunately, due to suboptimal tariff structures, rural water systems lack the financial liquidity to handle unforeseen events. This puts them in a difficult position, especially with the increasing water demand and resource scarcity driven by climate change. Therefore, adjusting the current tariff settings is necessary to achieve financial and operational sustainability, balancing cost recovery with other social, economic, and environmental objectives. This study aims to determine how pricing components, such as fixed charges and variable costs, influence consumer acceptability of different tariff systems. Using a choice experiment, we evaluated Chilean rural water consumers' preferences for different tariff schemes. The results show that individuals are highly conservative regarding the price structure. Participants preferred maintaining existing tariffs, consistently favoring the status quo over alternative tariff structures. Significantly, the likelihood of selecting a new tariff structure is influenced more by alterations in the variable component than by changes in the fixed price of water. These findings provide valuable insights for achieving a balanced and sustainable approach to rural water management and help policy designs.

Suggested Citation

  • Fernández, Francisco J. & Vásquez-Lavín, Felipe & Rivera, Diego & Hernández, Francisco & Bopp, Carlos & Campos-Requena, Nélyda & Ponce, Roberto D., 2024. "Policy Implications of Tariff Preferences in Rural Water Management: Insights from Chile," IAAE 2024 Conference, August 2-7, 2024, New Delhi, India 344377, International Association of Agricultural Economists (IAAE).
    • Handle: RePEc:ags:cfcp15:344377
    DOI: 10.22004/ag.econ.344377
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/344377/files/22220.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.344377?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. M. Genius & E. Hatzaki & E. Kouromichelaki & G. Kouvakis & S. Nikiforaki & K. Tsagarakis, 2008. "Evaluating Consumers’ Willingness to Pay for Improved Potable Water Quality and Quantity," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 22(12), pages 1825-1834, December.
    2. Koehler, Johanna & Thomson, Patrick & Hope, Robert, 2015. "Pump-Priming Payments for Sustainable Water Services in Rural Africa," World Development, Elsevier, vol. 74(C), pages 397-411.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fiorini, Matteo & Hoekman, Bernard, 2018. "Services trade policy and sustainable development," World Development, Elsevier, vol. 112(C), pages 1-12.
    2. Kevin Boyle & Sapna Kaul & Ali Hashemi & Xiaoshu Li, 2015. "Applicability of benefit transfers for evaluation of homeland security counterterrorism measures," Chapters, in: Carol Mansfield & V. K. Smith (ed.), Benefit–Cost Analyses for Security Policies, chapter 10, pages 225-253, Edward Elgar Publishing.
    3. Van Houtven, George L. & Pattanayak, Subhrendu K. & Usmani, Faraz & Yang, Jui-Chen, 2017. "What are Households Willing to Pay for Improved Water Access? Results from a Meta-Analysis," Ecological Economics, Elsevier, vol. 136(C), pages 126-135.
    4. Francesco Jacopo Pintus, 2023. "Valuing drinking water quality after a PFAS contamination event: results from a meta-analysis benefit transfer," "Marco Fanno" Working Papers 0308, Dipartimento di Scienze Economiche "Marco Fanno".
    5. Cook, Joseph & Wagner, Jake & Newell, Gunnar, 2020. "A Decision Support Tool for Rural Water Supply Planning," EfD Discussion Paper 20-6, Environment for Development, University of Gothenburg.
    6. Salvador Saz-Salazar & Miguel A. García-Rubio & Francisco González-Gómez & Andrés J. Picazo-Tadeo, 2016. "Managing Water Resources Under Conditions of Scarcity: On Consumers’ Willingness to Pay for Improving Water Supply Infrastructure," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 30(5), pages 1723-1738, March.
    7. Mesa-Jurado, Maria A. & Martin-Ortega, Julia & Ruto, Eric & Berbel, Julio, 2011. "The economic value of guaranteed water supply for irrigation under scarcity conditions," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114650, European Association of Agricultural Economists.
    8. Wanjiru, Evan M. & Zhang, Lijun & Xia, Xiaohua, 2016. "Model predictive control strategy of energy-water management in urban households," Applied Energy, Elsevier, vol. 179(C), pages 821-831.
    9. Zihan Guo & Ni Wang & Xiaolian Mao & Xinyue Ke & Shaojiang Luo & Long Yu, 2022. "Benefit Analysis of Economic and Social Water Supply in Xi’an Based on the Emergy Method," Sustainability, MDPI, vol. 14(9), pages 1-20, April.
    10. Jia Wang & Jiaoju Ge & Zhifeng Gao, 2018. "Consumers’ Preferences and Derived Willingness-to-Pay for Water Supply Safety Improvement: The Analysis of Pricing and Incentive Strategies," Sustainability, MDPI, vol. 10(6), pages 1-16, May.
    11. Roberto Ponce & Felipe Vásquez & Alejandra Stehr & Patrick Debels & Carlos Orihuela, 2011. "Estimating the Economic Value of Landscape Losses Due to Flooding by Hydropower Plants in the Chilean Patagonia," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 25(10), pages 2449-2466, August.
    12. Stefanos Xenarios & Kostas Bithas, 2009. "Welfare Improvisation from the Receiving Waters of Urban Wastewater Systems in the Context of the Water Framework Directive," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 23(5), pages 981-1000, March.
    13. Daniel L Wilson & Jeremy R Coyle & Evan A Thomas, 2017. "Ensemble machine learning and forecasting can achieve 99% uptime for rural handpumps," PLOS ONE, Public Library of Science, vol. 12(11), pages 1-13, November.
    14. Jacob Katuva & Rob Hope & Tim Foster & Johanna Koehler & Patrick Thomson, 2020. "Modelling Welfare Transitions to Prioritise Sustainable Development Interventions in Coastal Kenya," Sustainability, MDPI, vol. 12(17), pages 1-22, August.
    15. George Ekonomou & Dimitris Kallioras & Angeliki N. Menegaki & Sergio Alvarez, 2023. "Tourist Preferences for Revitalizing Wellness Products and Reversing Depopulation in Rural Destinations," Sustainability, MDPI, vol. 15(24), pages 1-31, December.
    16. Nikoleta Jones & Konstantinos Evangelinos & Petros Gaganis & Eugenia Polyzou, 2011. "Citizens’ Perceptions on Water Conservation Policies and the Role of Social Capital," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 25(2), pages 509-522, January.
    17. Michael Kaplowitz & Frank Lupi & Oscar Arreola, 2012. "Local Markets for Payments for Environmental Services: Can Small Rural Communities Self-Finance Watershed Protection?," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 26(13), pages 3689-3704, October.
    18. Smith, Daniel W. & Atwii Ongom, Stephen & Davis, Jennifer, 2023. "Does professionalizing maintenance unlock demand for more reliable water supply? Experimental evidence from rural Uganda," World Development, Elsevier, vol. 161(C).
    19. Zhang, Fan & Fogarty, James, 2015. "Nonmarket Valuation of Water Sensitive Cities: Current Knowledge and Issues," Working Papers 207694, University of Western Australia, School of Agricultural and Resource Economics.
    20. Dacinia Crina Petrescu & Ruxandra Mălina Petrescu-Mag & Dorin Iosif Manciula & Ioan Alin Nistor & Veronica Ioana Ilieș, 2018. "Wastewater Reflections in Consumer Mind: Evidence from Sewage Services Consumer Behaviour," Sustainability, MDPI, vol. 11(1), pages 1-15, December.

    More about this item

    Keywords

    Community/Rural/Urban Development; Consumer/Household Economics; Demand and Price Analysis;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:cfcp15:344377. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://iaae-agecon.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.