IDEAS home Printed from https://ideas.repec.org/a/eee/juipol/v43y2016ipap107-116.html
   My bibliography  Save this article

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

Author

Listed:
  • Molinos-Senante, María
  • Donoso, Guillermo

Abstract

Water demand management is one of the main issues in the water policy agenda. The objective of this work is to design a water rate model that internalizes the scarcity value of water and at the same time improves social concerns such as equity and affordability. The proposed water rate focuses on the variable component of the tariff and follows an increasing block strategy. An empirical application is developed for two Chilean regions. This application illustrates that the implementation of the proposed water rate creates incentives to improve water use sustainability and equity among users.

Suggested Citation

  • Molinos-Senante, María & Donoso, Guillermo, 2016. "Water scarcity and affordability in urban water pricing: A case study of Chile," Utilities Policy, Elsevier, vol. 43(PA), pages 107-116.
    • Handle: RePEc:eee:juipol:v:43:y:2016:i:pa:p:107-116
    DOI: 10.1016/j.jup.2016.04.014
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0957178715300680
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jup.2016.04.014?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Dale Whittington, 2006. "Pricing Water and Sanitation Services," Human Development Occasional Papers (1992-2007) HDOCPA-2006-18, Human Development Report Office (HDRO), United Nations Development Programme (UNDP).
    2. Jasper M. Dalhuisen & Raymond J. G. M. Florax & JHenri L. F. de Groot & Peter Nijkamp, 2003. "Price and Income Elasticities of Residential Water Demand: A Meta-Analysis," Land Economics, University of Wisconsin Press, vol. 79(2), pages 292-308.
    3. Sibly, Hugh & Tooth, Richard, 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), April.
    4. Dennis Wichelns, 2013. "Enhancing the performance of water prices and tariff structures in achieving socially desirable outcomes," International Journal of Water Resources Development, Taylor & Francis Journals, vol. 29(3), pages 310-326, September.
    5. Natalie Chun, 2014. "Increasing access to water services: a cost-recoverable pricing model," International Journal of Water Resources Development, Taylor & Francis Journals, vol. 30(4), pages 662-679, December.
    6. Grafton, R. Quentin & Chu, Long & Kompas, Tom, 2015. "Optimal water tariffs and supply augmentation for cost-of-service regulated water utilities," Utilities Policy, Elsevier, vol. 34(C), pages 54-62.
    7. Stefano Farolfi & Jordi Gallego-Ayala, 2014. "Domestic water access and pricing in urban areas of Mozambique: between equity and cost recovery for the provision of a vital resource," International Journal of Water Resources Development, Taylor & Francis Journals, vol. 30(4), pages 728-744, December.
    8. Pinto, Francisco Silva & Marques, Rui Cuhna, 2015. "Tariff recommendations: A Panacea for the Portuguese water sector?," Utilities Policy, Elsevier, vol. 34(C), pages 36-44.
    9. Franceys, Richard W.A. & Gerlach, Esther, 2011. "Consumer involvement in water services regulation," Utilities Policy, Elsevier, vol. 19(2), pages 61-70, June.
    10. Barbosa, Alexandro & Brusca, Isabel, 2015. "Governance structures and their impact on tariff levels of Brazilian water and sanitation corporations," Utilities Policy, Elsevier, vol. 34(C), pages 94-105.
    11. Beecher, Janice A. & Kalmbach, Jason A., 2013. "Structure, regulation, and pricing of water in the United States: A study of the Great Lakes region," Utilities Policy, Elsevier, vol. 24(C), pages 32-47.
    12. Sonia Ferdous Hoque & Dennis Wichelns, 2013. "State-of-the-art review: designing urban water tariffs to recover costs and promote wise use," International Journal of Water Resources Development, Taylor & Francis Journals, vol. 29(3), pages 472-491, September.
    13. Guerrini, Andrea & Romano, Giulia, 2013. "The process of tariff setting in an unstable legal framework: An Italian case study," Utilities Policy, Elsevier, vol. 24(C), pages 78-85.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Molinos-Senante, María & Villegas, Andres & Maziotis, Alexandros, 2019. "Are water tariffs sufficient incentives to reduce water leakages? An empirical approach for Chile," Utilities Policy, Elsevier, vol. 61(C).
    2. Sara Soares & Daniela Terêncio & Luís Fernandes & João Machado & Fernando A.L. Pacheco, 2019. "The Potential of Small Dams for Conjunctive Water Management in Rural Municipalities," IJERPH, MDPI, vol. 16(7), pages 1-17, April.
    3. Favre, Marine & Montginoul, Marielle, 2018. "Water pricing in Tunisia: Can an original rate structure achieve multiple objectives?," Utilities Policy, Elsevier, vol. 55(C), pages 209-223.
    4. Jingdong Zhang & Jiatian Fu & Chaoyang Liu & Zhiguang Qu & Yanan Li & Fei Li & Zhaofei Yang & Luping Jiang, 2019. "Evaluating Water Resource Assets Based on Fuzzy Comprehensive Evaluation Model: A Case Study of Wuhan City, China," Sustainability, MDPI, vol. 11(17), pages 1-16, August.
    5. Amaral, António L. & Martins, Rita & Dias, Luís C., 2023. "Operational drivers of water reuse efficiency in Portuguese wastewater service providers," Utilities Policy, Elsevier, vol. 83(C).
    6. Zeyu Wang & Juqin Shen & Fuhua Sun & Zhaofang Zhang & Dandan Zhang & Yizhen Jia & Kaize Zhang, 2019. "A Pricing Model for Groundwater Rights in Ningxia, China Based on the Fuzzy Mathematical Model," IJERPH, MDPI, vol. 16(12), pages 1-20, June.
    7. Romano, Giulia & Guerrini, Andrea & Senoner, Thomas, 2020. "Establishing a new water tariff method that complies with european principles and respects statutory autonomy: The case of South Tyrol," Utilities Policy, Elsevier, vol. 64(C).
    8. Garrone, Paola & Grilli, Luca & Marzano, Riccardo, 2019. "Price elasticity of water demand considering scarcity and attitudes," Utilities Policy, Elsevier, vol. 59(C), pages 1-1.
    9. Agnieszka Starzyk & Janusz Marchwiński & Eliza Maciejewska & Piotr Bujak & Kinga Rybak-Niedziółka & Magdalena Grochulska-Salak & Zdzisław Skutnik, 2023. "Resilience in Urban and Architectural Design—The Issue of Sustainable Development for Areas Associated with an Embankment," Sustainability, MDPI, vol. 15(11), pages 1-25, June.
    10. Ashwani Kumar Tiwari & Enrico Suozzi & Carlos Silva & Marina De Maio & Mariachiara Zanetti, 2021. "Role of Integrated Approaches in Water Resources Management: Antofagasta Region, Chile," Sustainability, MDPI, vol. 13(3), pages 1-21, January.
    11. Piubello Orsini, Luca & Leardini, Chiara & Danesi, Letizia & Guerrini, Andrea & Frison, Nicola, 2023. "Circular economy in the water and wastewater sector: Tariff impact and financial performance of SMARTechs," Utilities Policy, Elsevier, vol. 83(C).
    12. Curran, Franziska & Smart, Simon & Lacey, Justine & Greig, Chris & Lant, Paul, 2018. "Learning from experience in the water sector to improve access to energy services," Utilities Policy, Elsevier, vol. 51(C), pages 41-50.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zhang, Xue & Rivas, Marcela Gonzalez & Grant, Mary & Warner, Mildred E., 2021. "Water Pricing and Affordability in the US: Public vs Private Ownership," SocArXiv 7mc4r, Center for Open Science.
    2. Alemken Jegnie & James Fogarty & Sayed Iftekhar, 2023. "Urban Residential Water Demand and Household Size: A Robust Meta‐Regression Analysis," The Economic Record, The Economic Society of Australia, vol. 99(326), pages 436-453, September.
    3. Marta Suárez-Varela & Roberto Martínez-Espiñeira, 2018. "A proposal for the analysis of price escalation within water tariffs: The impact of the Water Framework Directive in Spain," Environment and Planning C, , vol. 36(4), pages 726-749, June.
    4. Whittington, Dale & Nauges, Céline & Fuente, David & Wu, Xun, 2015. "A diagnostic tool for estimating the incidence of subsidies delivered by water utilities in low- and medium-income countries, with illustrative simulations," Utilities Policy, Elsevier, vol. 34(C), pages 70-81.
    5. Garrone, Paola & Grilli, Luca & Marzano, Riccardo, 2019. "Price elasticity of water demand considering scarcity and attitudes," Utilities Policy, Elsevier, vol. 59(C), pages 1-1.
    6. Mónica Maldonado-Devis & Vicent Almenar-Llongo, 2021. "A Panel Data Estimation of Domestic Water Demand with IRT Tariff Structure: The Case of the City of Valencia (Spain)," Sustainability, MDPI, vol. 13(3), pages 1-26, January.
    7. Piubello Orsini, Luca & Leardini, Chiara & Danesi, Letizia & Guerrini, Andrea & Frison, Nicola, 2023. "Circular economy in the water and wastewater sector: Tariff impact and financial performance of SMARTechs," Utilities Policy, Elsevier, vol. 83(C).
    8. Cooper, Bethany & Crase, Lin, 2016. "Governing water service provision: Lessons from Australia," Utilities Policy, Elsevier, vol. 43(PA), pages 42-47.
    9. Jordi Honey-Rosés & Claudio Pareja, 2019. "Metrics and Methods for Comparing Water Utility Rate Structures," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 5(02), pages 1-31, April.
    10. Fuente, David, 2019. "The design and evaluation of water tariffs: A systematic review," Utilities Policy, Elsevier, vol. 61(C).
    11. D'Amore, Gabriella & Landriani, Loris & Lepore, Luigi, 2021. "Ownership and sustainability of Italian water utilities: The stakeholder role," Utilities Policy, Elsevier, vol. 71(C).
    12. Ruiz-Rosa, Inés & García-Rodríguez, Francisco J. & Antonova, Natalia, 2020. "Developing a methodology to recover the cost of wastewater reuse: A proposal based on the polluter pays principle," Utilities Policy, Elsevier, vol. 65(C).
    13. Lee, Changyen & Cheng, Chun-Fa & Chuang, Min-Ta & Hsu, Wei-Chieh & Chen, Yen-Hung & Cheng, Kuo-Tai, 2018. "How transparency and accountability matter in regulating the Taiwan Water Supply Corporation," Utilities Policy, Elsevier, vol. 52(C), pages 50-58.
    14. Olmstead, Sheila M. & Michael Hanemann, W. & Stavins, Robert N., 2007. "Water demand under alternative price structures," Journal of Environmental Economics and Management, Elsevier, vol. 54(2), pages 181-198, September.
    15. Giuseppe Maggiotto & Gianpiero Colangelo & Marco Milanese & Arturo de Risi, 2023. "Thermochemical Technologies for the Optimization of Olive Wood Biomass Energy Exploitation: A Review," Energies, MDPI, vol. 16(19), pages 1-17, September.
    16. Nataraj, Shanthi & Hanemann, W. Michael, 2011. "Does marginal price matter? A regression discontinuity approach to estimating water demand," Journal of Environmental Economics and Management, Elsevier, vol. 61(2), pages 198-212, March.
    17. repec:wly:econjl:v::y:2017:i:605:p:f236-f265 is not listed on IDEAS
    18. Katrin Millock & Céline Nauges, 2010. "Household Adoption of Water-Efficient Equipment: The Role of Socio-Economic Factors, Environmental Attitudes and Policy," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 46(4), pages 539-565, August.
    19. Rosenberger, Randall S. & Stanley, Tom D., 2006. "Measurement, generalization, and publication: Sources of error in benefit transfers and their management," Ecological Economics, Elsevier, vol. 60(2), pages 372-378, December.
    20. Clements, Kenneth W., 2008. "Price elasticities of demand are minus one-half," Economics Letters, Elsevier, vol. 99(3), pages 490-493, June.
    21. John Freebairn, 2013. "Imperfect Knowledge and Urban Water Decisions," Economic Papers, The Economic Society of Australia, vol. 32(1), pages 32-40, March.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:juipol:v:43:y:2016:i:pa:p:107-116. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.sciencedirect.com/journal/utilities-policy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.