On the Marginal Cost of Wastewater Services

Hanke, Steve H.; Wentworth, R. L.

doi:10.2307/3145671

Cited by 15 publications

(5 citation statements)

References 8 publications

(8 reference statements)

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“…Also note the negative and significant coefficient on population growth, which indicates that higher growth leads to lower per capita expenditures. Hanke and Wentworth (1981) found economies of scale in sewer expenditures, and if their (now rather old) results hold, it appears that both higher population and higher population density can lower per capita sewer expenditures.…”

Section: Population Density and Infrastructure Expendituresmentioning

confidence: 94%

The Impact of Population Density on Municipal Government Expenditures

Holcombe

Williams

2008

Public Finance Review

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Data from 487 municipal governments with populations greater than 50,000 are examined to see the relationship between population density and per capita government expenditures. There is no statistically significant relationship between per capita total government expenditures and operational expenditures for cities smaller than 500,000, and for larger cities, higher population density is associated with higher per capita government expenditures. Infrastructure expenditures tend to decline with increases in population density for cities smaller than 500,000, whereas expenditures on services tend to increase with population density for cities larger than 500,000. The relationship between per capita total expenditures and population density has policy relevance because it indicates that when all government expenditures are taken into account, policies that increase population density will not reduce per capita government expenditures and, in larger cities, will lead to higher per capita government expenditures.

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Section: Population Density and Infrastructure Expendituresmentioning

confidence: 94%

The Impact of Population Density on Municipal Government Expenditures

Holcombe

Williams

2008

Public Finance Review

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“…A smaller number of studies addresses the issue of sewage treatment costs. Hanke and Wentworth (1981) employ engineering data on construction and operating costs of representative sewage treatment facilities. The authors regress total cost on output and output squared and find support for the presence of scale economies.…”

Section: Past Researchmentioning

confidence: 99%

Municipal Water Supply and Sewage Treatment: Costs, Prices, and Distortions

Renzetti¹

1999

The Canadian Journal of Economics / Revue canadienne d'Economiq

105

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Municipal water supply and sewage treatment utilities in Ontario, Canada, are studied in order to establish their costs of supply and evaluate their pricing practices. Prices charged to residential and commercial customers are found to be only a third and a sixth of the estimated marginal cost for water supply and sewage treatment, respectively. For example, the average price to residential customers is $0.32/m 3 while the estimated marginal cost is $0.87/m 3 . The estimated cost parameters are combined with estimated residential and non-residential demands functions in order to calculate approximate welfare losses that arise from over consumption. JEL classification code: Q25, L32Notes to Table 2: 1. Elasticities are calculated using mean values of the data. Figures in parentheses are standard errors.

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“…That is, the unit costs of the service should be kept at the minimum level. But in the actual pricing process of a public service, many constraints exist in the application of the marginal cost method, such as externality problems, distortion in inputs and outputs, and incompleteness of consumer information (Hanke andWentworth 1981, Raftelis 1992). Therefore, offsets by the marginal cost principle are frequently used, or else marginal cost pricing may cause the service provider to experience a financial deficit.…”

Section: Analysis Of Pricing Principles For Wastewater Servicesmentioning

confidence: 99%

Analysis and design on pricing urban wastewater services in Wuhan City

Yong¹,

Borthwick²,

Wu³

2008

NURW

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The current paper describes a pricing strategy for urban wastewater treatment, as informed by model simulations. First, the concepts and principles related to wastewater service charges are discussed. An analysis is made of the economic conditions of Wuhan city in China. Then, a pricing model is established for setting wastewater service charges for the Wuhan Urban Drainage Development Co., Ltd (WUDDC). By including user -demand elasticity and government subsidy, model simulations are used to predict the future financial status of WUDDC. Finally, recommendations are made based on the model results, aimed at developing and improving Wuhan's local policy for setting wastewater service charges.

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On the Marginal Cost of Wastewater Services

Cited by 15 publications

References 8 publications

The Impact of Population Density on Municipal Government Expenditures

The Impact of Population Density on Municipal Government Expenditures

Municipal Water Supply and Sewage Treatment: Costs, Prices, and Distortions

Analysis and design on pricing urban wastewater services in Wuhan City

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