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A proposal for social pricing of water supply in Côte d'Ivoire

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  • Diakité, Daouda
  • Semenov, Aggey
  • Thomas, Alban

Abstract

We consider the design of a nonlinear social tariff for residential water in Côte d'Ivoire, which is a case of a monopolistic private operator supplying a population of heterogeneous consumers. The proposed optimal tariff includes an initial "social" block with a low unit price, and higher consumption blocks with a monopoly pricing rule. This optimal nonlinear tariff is calibrated using econometric estimates of a panel-data residential water demand equation. Welfare changes associated with moving from the actual tariff to approximations of the optimal pricing system are computed under different tariff scenarios. We find that gains in consumer welfare would outweigh losses in producer surplus in a majority of Ivorian local communities.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Development Economics.

Volume (Year): 88 (2009)
Issue (Month): 2 (March)
Pages: 258-268

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Handle: RePEc:eee:deveco:v:88:y:2009:i:2:p:258-268

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Web page: http://www.elsevier.com/locate/devec

Related research

Keywords: C33 I38 O13 Q25 Multi-block tariff Social pricing Residential water supply;

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Cited by:
  1. Céline Nauges & Dale Whittington, 2010. "Estimation of Water Demand in Developing Countries: An Overview," World Bank Research Observer, World Bank Group, World Bank Group, vol. 25(2), pages 263-294, August.
  2. 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.
  3. Henrique Monteiro, 2010. "Residential Water Demand in Portugal: checking for efficiency-based justifications for increasing block tariffs," Working Papers Series 1, ISCTE-IUL, Business Research Unit (BRU-IUL) ercwp0110, ISCTE-IUL, Business Research Unit (BRU-IUL).
  4. Sidibé, Amadou, 2010. "Demand for soil, water and forest conservation in Burkina Faso," Department of Forest Economics publications, Swedish University of Agricultural Sciences, Department of forest economics 2345, Swedish University of Agricultural Sciences, Department of forest economics.
  5. SaÄŸlam, YiÄŸit, 2011. "Optimal Pricing of Water: Optimal Departures from the Inverse Elasticity Rule," Working Paper Series, Victoria University of Wellington, School of Economics and Finance 1533, Victoria University of Wellington, School of Economics and Finance.
  6. Barde, Julia Alexa & Lehmann, Paul, 2013. "Distributional effects of water tariff reforms: An empirical study for Lima, Peru," UFZ Discussion Papers 14/2013, Helmholtz Centre for Environmental Research (UFZ), Division of Social Sciences (ÖKUS).
  7. Rui Fragoso & Carlos Marques, 2013. "The Economic Impact of Alternative Water Pricing Policies in Alentejo Region," CEFAGE-UE Working Papers 2013_02, University of Evora, CEFAGE-UE (Portugal).

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