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Renewal of water-related infrastructure and user\'s contribution: a few benchmarks

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  • Epiphane Assouan
  • Tina Rambonilaza
  • Bénédicte Rulleau

Abstract

This paper studies the contribution required from the users of collective drinking water networks to finance asset management of infrastructures. We characterize the first-best optimum and we compare it to the social optimum in the presence of preferences heterogeneity, in order to take into account the uses of alternative techniques for certain household needs. These alternatives uses generate negative externalities for the good functioning of the water networks. The first-best optimum thus requires a transfer from the exclusive users of the collective network to the users of the alternatives. Furthermore, Nash equilibrium reveals that the existence of this transfer requires other motivations than the only usage values. Finally, the case of water infrastructure asset management emphasizes how an essential part of inequality that can be associated with it can be attributed to preferences heterogeneity.

Suggested Citation

  • Epiphane Assouan & Tina Rambonilaza & Bénédicte Rulleau, 2018. "Renewal of water-related infrastructure and user\'s contribution: a few benchmarks," Cahiers du GREThA (2007-2019) 2018-19, Groupe de Recherche en Economie Théorique et Appliquée (GREThA).
    • Handle: RePEc:grt:wpegrt:2018-19
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    File URL: http://cahiersdugretha.u-bordeaux.fr/2018/2018-19.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    water services ; willigness to pay ; pur public good ; game theory;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water

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