Supporting the Development of Municipal Water Policy: A study of the United States with Implications for Other Nations

The challenges faced by both developed and developing nations to collect, distribute, and conserve water are becoming even more difficult. While different strategies have been attempted by different governments, an economically viable solution appears to be the use of increasing block-rate tariffs. In the United States, determining its feasibility of implementation and potential for success currently involves large and expensive surveys paired with various marketing and advertising strategies. Our paper helps alleviate these logistical challenges by constructing a model that accounts for differences in block pricing structures across the continental U.S. and estimating the probability that a community with particular characteristics would have such a pricing structure. Using data on 467 communities in each of the 48 contiguous states, our model and conditioning set explains a substantial amount of block pricing variation across the U.S., aiding policy makers when exploring conservation alternatives to regulation. Our model can also lay the groundwork for similar studies in other nations that are contemplating similar conservation strategies.