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Whose Values Count? Demand Management for Melbourne's Water

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  • GEOFF EDWARDS

Abstract

An assessment is provided of Melbourne's rising block tariff for water and its prescriptive regulation of water use through non‐price restrictions. The three‐step rising block tariff fares poorly on economic efficiency and on widely used notions of equity. A two‐block tariff could remove much of the inefficiency in a three‐block tariff, but one‐price‐for‐all water would be the most efficient way to ration water on conventional definitions. The non‐price restrictions on water use are prescriptive, denying households the opportunity to decide how to make any cuts in water use required of them. State values usurp private values.

Suggested Citation

  • Geoff Edwards, 2006. "Whose Values Count? Demand Management for Melbourne's Water," The Economic Record, The Economic Society of Australia, vol. 82(s1), pages 54-63, September.
    • Handle: RePEc:bla:ecorec:v:82:y:2006:i:s1:p:s54-s63
    DOI: 10.1111/j.1475-4932.2006.00332.x
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    References listed on IDEAS

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    1. Greg Barrett, 2004. "Water Conservation: The Role Of Price And Regulation In Residential Water Consumption," Economic Papers, The Economic Society of Australia, vol. 23(3), pages 271-285, September.
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    1. repec:ipg:wpaper:2014-484 is not listed on IDEAS
    2. Glyn Wittwer, 2013. "Urban Water Management in Response to Prolonged Droughts and Urban Growth," Economic Papers, The Economic Society of Australia, vol. 32(1), pages 41-50, March.
    3. Hugh Sibly & Richard Tooth, 2014. "The consequences of using increasing block tariffs to price urban water," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 58(2), pages 223-243, April.
    4. Neil Byron & Alan Johnston & Rick Baker & Andrew Barker, 2008. "Towards Urban Water Reform," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 41(4), pages 401-412, December.
    5. David R. Bell & Ronald C. Griffin, 2011. "Urban Water Demand with Periodic Error Correction," Land Economics, University of Wisconsin Press, vol. 87(3), pages 528-544.
    6. Hughes, Neal & Hafi, Ahmed & Goesch, Tim & Brownlowe, Nathan, 2008. "Urban water management: optimal price and investment policy under uncertainty," 2008 Conference (52nd), February 5-8, 2008, Canberra, Australia 6005, Australian Agricultural and Resource Economics Society.
    7. Productivity Commission, 2008. "Towards Urban Water Reform: A Discussion Paper," Research Papers 0801, Productivity Commission, Government of Australia.
    8. Glyn Wittwer, 2009. "The Economic Impacts of a New Dam in South‐East Queensland," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 42(1), pages 12-23, March.
    9. John Freebairn, 2013. "Imperfect Knowledge and Urban Water Decisions," Economic Papers, The Economic Society of Australia, vol. 32(1), pages 32-40, March.
    10. Barker, Andrew & Murray, Tim & Salerian, John, 2010. "Developing a Partial Equilibrium Model of an Urban Water System," Staff Working Papers 102, Productivity Commission, Government of Australia.
    11. Freebairn, John W., 2012. "Risk Aversion and Urban Water Decisions," 2012 Conference (56th), February 7-10, 2012, Fremantle, Australia 124206, Australian Agricultural and Resource Economics Society.
    12. Cooper, Bethany & Crase, Lin & Burton, Michael P., 2010. "Urban Water Restrictions: Attitudes and Avoidance," 2010 Conference (54th), February 10-12, 2010, Adelaide, Australia 58892, Australian Agricultural and Resource Economics Society.
    13. Hughes, Neal & Hafi, Ahmed & Goesch, Tim, 2009. "Urban water management: optimal price and investment policy under climate variability," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 53(2), pages 1-18.
    14. Griffin, Ronald C. & Mjelde, James W., 2011. "Distributing water's bounty," Ecological Economics, Elsevier, vol. 72(C), pages 116-128.

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