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Affordability of water supply in Mongolia: Empirical lessons for measuring affordability

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  • Gawel, Erik
  • Sigel, Katja
  • Bretschneider, Wolfgang
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    Abstract

    Affordability of water services is a pressing water policy issue for both the developed and in particular the developing world. Despite its well-known theoretical shortcomings affordability analysis for water supply is up to now widely based on the ratio of a household's water expenditure and income (CAR). However in the housing sector alternative concepts of measuring affordability have been developed among them the potential affordability approach (PAA) and the residual income approach (RIA). Against this background the article compares three prominent affordability measures (CAR, PAA, RIA) on the basis of an empirical case study of a ger i.e. low income area in the Mongolian city of Darkhan using household data from a survey conducted in 2009. Thus we gain insight into both the water-related affordability situation of people in Mongolia checking the World Bank's thesis of missing affordability problems in this country as well as the comparative functionality of different affordability measures. Additionally, institutional as well as access-driven problems of water supply are introduced into the analysis. It is shown that affordability problems quite occur for considerable parts of the households but have to be distinguished depending on the economic causation: We argue that none of the regarded measures gives a satisfyingly contoured notion of affordability properly distinguished from the adjacent problems of poverty and access. A mere CAR analysis does not provide sound recommendations for water policy at all. In particular, problems of access entailing non-pecuniary costs of water provision have to be taken into account and might explain both problems of underconsumption and given CAR-affordability at the same time. --

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    Bibliographic Info

    Paper provided by Helmholtz Centre for Environmental Research (UFZ), Division of Social Sciences (ÖKUS) in its series UFZ Discussion Papers with number 9/2011.

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    Date of creation: 2011
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    Handle: RePEc:zbw:ufzdps:92011

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    Keywords: affordability; Mongolia; water supply; water access; potential affordability approach; residual income approach; non-pecuniary cost;

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    11. Raffaele Miniaci & Carlo Scarpa & Paola Valbonesi, 2008. "Measuring The Affordability Of Basic Public Utility Services In Italy," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 67(2), pages 185-230, July.
    12. Fankhauser, Samuel & Tepic, Sladjana, 2007. "Can poor consumers pay for energy and water? An affordability analysis for transition countries," Energy Policy, Elsevier, vol. 35(2), pages 1038-1049, February.
    13. Kessides, Ioannis & Miniaci, Raffaele & Scarpa, Carlo & Valbonesi, Paola, 2009. "Toward defining and measuring the affordability of public utility services," Policy Research Working Paper Series 4915, The World Bank.
    14. REYNAUD Arnaud, 2006. "Assessing the impact of public regulation and private participation on water affordability for poor households: An empirical investigation of the French case," LERNA Working Papers 06.09.202, LERNA, University of Toulouse.
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