Increasing Block Tariffs in an Arid Developing Country: A Discrete/Continuous Choice Model of Residential Water Demand in Jordan

Klassert, Christian; Sigel, Katja; Klauer, Bernd; Gawel, Erik

doi:10.3390/w10030248

Cited by 24 publications

(22 citation statements)

References 48 publications

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“…These papers cover a large number of countries (Spain, France, Jordan, Australia, Bangladesh, Brazil, Lithuania, Peru, Poland, Russia, Serbia, Tanzania, Zambia, Zimbabwe, Colombia, India and Unites States of America). Some papers deal with the impact of water metering on residential water use (i.e., [46][47][48]), while others consider pricing policies (i.e., [49,50]), non-price policies (i.e., [51,52]) or the performance of water services (i.e., [53,54]). All selected papers contribute to a better understanding of residential water use, and they provide relevant results for policy-makers in charge of water management.…”

Section: Resultsmentioning

confidence: 99%

Advances in the Economic Analysis of Residential Water Use: An Introduction

Reynaud

Romano

2018

Water

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The aim of this Special Issue is to gather evidence on the impact of price policies (PP) and non-price policies (NPP) in shaping residential water use in a context of increased water scarcity. Indeed, a large body of the empirical economic literature on residential water demand has been devoted to measuring the impact of PP (water price increases, use of block rate pricing or peak pricing, etc.). The consensus is that the residential water demand is inelastic with respect to water price, but not perfectly. Given the low water price elasticity, pricing schemes may not always be effective tools for modifying household water behaviors. This is puzzling since increasing the water price is still viewed by public authorities as the most direct economic tool for inducing water conservation behaviors. Additional evidence regarding the use of PP in shaping residential water use is then required. More recently, it has been argued that residential consumers may react to NPP, such as water conservation programs, education campaigns, or smart metering. NPP are based on the idea that residential water users can implement strategies that will result in water savings via changing their individual behaviors. Feedback information based on smart water metering is an example of approach used by some water utilities. There are still large gaps in the knowledge on the residential water demand, and in particular on the impact of PP and NPP on residential water use, household water affordability and water service performance. These topics are addressed in this Special Issue “Advances in the Economic Analysis of Residential Water Use”.

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Section: Resultsmentioning

confidence: 99%

Advances in the Economic Analysis of Residential Water Use: An Introduction

Reynaud

Romano

2018

Water

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“…Asides from financial independence factor, the water conservation aspect is also a concern so that tariffs were designed in order the community practiced water saving (Whittington, 1992). Based on the financial aspects, justice for low income households, and conservation aspects, tariff design called increasing block tariff (IBT) is well known, which is the tariff goes higher along with increasing of water consumption and establishment of low water tariff for basic needs consumption with the aim to subsidize low income households (Whittington, 1992;Klassert et al, 2018;Lopez-Nicolas et al, 2018). This IBT Tariff feasibility analysis can be done in several ways including comparing the tariff applied with the theoretical tariffs from the calculation results (Indayani, 2013), using break-even point analysis to assess the feasibility of revenue from the tariff applied (Mauliyah, 2016), or based on the water supply investment feasibility which is assessed from net present value (NPV), internal rate of return (IRR), and payback period (PBP) (Istichori, Wiguna and Masduqi, 2018).…”

Section: Discussionmentioning

confidence: 99%

Acceptance Analysis of PDAM Sleman’s Water Tariff Based on Revenue and Wilingness to Pay Projection

Wardiha

Istiarto

Nurrochmad

2021

Journal of the Civil Engineering Forum

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The Regional Water Company (PDAM) of Sleman provides clean water to the community and charges a tariff for each cubic meter of water sold to customers. Minister of Home Affairs Regulation No. 71 of 2016 states that PDAM tariffs requiring a review every four years. Most recently tariffs set by PDAM Sleman was in 2016 therefore it requires a recalculation. Besides that, it is necessary to analyze the tariff acceptance from the service provider and service recipient’s point of view. Calculation tariff method utilized a formula based on the Minister of Home Affairs Regulation No. 71 of 2016. Acceptance analysis conducted by calculating the projection of water sales revenue, the profit to earning assets ratio, and the willingness to pay (WTP) projection of customers. Revenue projections were obtained by multiplying tariffs with the water sold volume. The WTP projection is carried out using the inflation method based on the WTP of PDAM Sleman customers from the 2007’s research. PDAM Sleman tariffs based on calculations resulted low tariffs of IDR3727.48, basic tariffs of IDR4659.36, and full rate of IDR9460.17. Based on the WTP analysis, the tariffs are feasible from the the service recipient’s point of view, which are the PDAM customers, because it is still affordable by customers for their average water consumption. Nevertheless, from the point of view of the service provider, which is PDAM Sleman, the tariffs are not feasible because the profit ratio of 0.31% is still much lower than the fairness profit ratio as 10% amount. Therefore, it is necessary to make tariff adjustments to increase profits. The adjustment strategies such as by determined tariffs only based on consumption blocks without breaking down based on customer group categories and adjusting the range of second and third consumption blocks.

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“…A total of 1,823 representative urban water-user agents capture various types of households, refugee households, and commercial establishments across all 89 subdistricts of Jordan. These water-user agents determine their demand for piped and tanker water and their utility derived from water consumption by applying a tiered supply-curve approach ( 18 , 47 ), based on econometric demand-function estimates ( 48 ) parameterized with census and survey data for households and establishments ( n = 16,153). Piped-water demands account for local supply intermittency and storage constraints.…”

Section: Methodsmentioning

confidence: 99%

A coupled human–natural system analysis of freshwater security under climate and population change

Yoon

Klassert

Selby

et al. 2021

Proc. Natl. Acad. Sci. U.S.A.

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Limited water availability, population growth, and climate change have resulted in freshwater crises in many countries. Jordan’s situation is emblematic, compounded by conflict-induced population shocks. Integrating knowledge across hydrology, climatology, agriculture, political science, geography, and economics, we present the Jordan Water Model, a nationwide coupled human–natural-engineered systems model that is used to evaluate Jordan’s freshwater security under climate and socioeconomic changes. The complex systems model simulates the trajectory of Jordan’s water system, representing dynamic interactions between a hierarchy of actors and the natural and engineered water environment. A multiagent modeling approach enables the quantification of impacts at the level of thousands of representative agents across sectors, allowing for the evaluation of both systemwide and distributional outcomes translated into a suite of water-security metrics (vulnerability, equity, shortage duration, and economic well-being). Model results indicate severe, potentially destabilizing, declines in freshwater security. Per capita water availability decreases by approximately 50% by the end of the century. Without intervening measures, >90% of the low-income household population experiences critical insecurity by the end of the century, receiving <40 L per capita per day. Widening disparity in freshwater use, lengthening shortage durations, and declining economic welfare are prevalent across narratives. To gain a foothold on its freshwater future, Jordan must enact a sweeping portfolio of ambitious interventions that include large-scale desalinization and comprehensive water sector reform, with model results revealing exponential improvements in water security through the coordination of supply- and demand-side measures.

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Increasing Block Tariffs in an Arid Developing Country: A Discrete/Continuous Choice Model of Residential Water Demand in Jordan

Cited by 24 publications

References 48 publications

Advances in the Economic Analysis of Residential Water Use: An Introduction

Advances in the Economic Analysis of Residential Water Use: An Introduction

Acceptance Analysis of PDAM Sleman’s Water Tariff Based on Revenue and Wilingness to Pay Projection

A coupled human–natural system analysis of freshwater security under climate and population change

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