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A fuzzy approach to water pricing: the case of Shanghai

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  • Weide Mao
  • Chien-Ting Lin
  • Chia-Cheng Ho
  • Ching-Chang Wang

Abstract

In this article, we device a methodology to value water using Fuzzy theory that incorporates not only the physical cost of delivery but also the social and sustainable resource costs that water regulators often ignore. Specifically, we include the cost of water quality, cost of water resource, gross domestic product per capita and the household's willingness to pay into our estimation. We demonstrate the approach using the household sector in Shanghai where the residents face potential water shortage and poor water quality. We estimate a theoretical price of 1.82 Chinese Yuan per cubic meter for the average household.

Suggested Citation

  • Weide Mao & Chien-Ting Lin & Chia-Cheng Ho & Ching-Chang Wang, 2008. "A fuzzy approach to water pricing: the case of Shanghai," Applied Economics Letters, Taylor & Francis Journals, vol. 15(9), pages 717-722.
    • Handle: RePEc:taf:apeclt:v:15:y:2008:i:9:p:717-722
    DOI: 10.1080/13504850600748976
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    References listed on IDEAS

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    1. Mary E. Renwick & Sandra O. Archibald, 1998. "Demand Side Management Policies for Residential Water Use: Who Bears the Conservation Burden?," Land Economics, University of Wisconsin Press, vol. 74(3), pages 343-359.
    2. Steve H. Hanke & Roland W. Wentworth, 1981. "On the Marginal Cost of Wastewater Services," Land Economics, University of Wisconsin Press, vol. 57(4), pages 558-567.
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