Increasing access to water services: a cost-recoverable pricing model

Abstract

Pricing policies can serve as a low-cost and effective tool for increasing access to water and sanitation services among poor households while allowing the provider to recover costs. An empirical model is applied to contingent-valuation survey data for water services in Cebu, Philippines. Pricing policies that utilizes a low one-time connection fee and differentiates tariffs based on wealth results in a 3 to 9-fold increase in water services access by poor households over the base pricing policy. The results provide evidence that price-discrimination techniques can be important tools toward achieving greater coverage and financial solvency of important services.

Water scarcity and affordability in urban water pricing: A case study of Chile

“…Barbosa and Brusca, 2015;Chun, 2014;Farolfi and Gallego-Ayala, 2014;Sibly and Tooth, 2014;Guerrini and Romano, 2013;Olmstead and Stavins, 2009;Letsoalo et al, 2007). From a policy perspective, the European Union Water Framework Directive promoted taxing water users in a way that reflects the scarcity value of water.…”

Urban water pricing in Chile: cost recovery, affordability, and water conservation

“…Water pricing is one of various economic policy instruments that could be used to increase the efficient and rational use of water . Numerous studies addressing urban water‐pricing topics have been conducted . A survey on water pricing models concluded that this economic instrument is effective in combining water and sanitation services’ efficiency and revenue requirements.…”

“…7 Numerous studies addressing urban water-pricing topics have been conducted. [8][9][10] A survey on water pricing models 11 concluded that this economic instrument is effective in combining water and sanitation services' efficiency and revenue requirements. Urban water pricing policies are a lowcost and effective tool to increase access to water and sanitation services.…”

“…Urban water pricing policies are a lowcost and effective tool to increase access to water and sanitation services. 9 However, when water tariffs are low and operators do not fully recover their service's costs, water consumption is unsustainable, infrastructure maintenance is compromised, which leads to more frequent service interruptions, 12 and, thus, affects the sustainability of the water supply and sanitation (WSS) systems. Hence, several countries have revised their water pricing policies in such a way so as to help manage reduced water supplies.…”

“…A survey on water pricing models concluded that this economic instrument is effective in combining water and sanitation services’ efficiency and revenue requirements. Urban water pricing policies are a low‐cost and effective tool to increase access to water and sanitation services . However, when water tariffs are low and operators do not fully recover their service's costs, water consumption is unsustainable, infrastructure maintenance is compromised, which leads to more frequent service interruptions, and, thus, affects the sustainability of the water supply and sanitation (WSS) systems.…”