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The Welfare Economics of Optional Water Metering

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  • Simon Cowan

Abstract

A model of decentralised metering decisions that applies to the water industry is developed. The social benefit of metering is higher the more sensitive demand is to the price. Allowing households to choose whether or not to have meters is efficient when only small households should have meters but does not work when the regulator does not know household characteristics and only larger households should have meters. The policy of requiring meters to be provided free, which has been adopted in England and Wales, is analysed. Copyright © The Author(s). Journal compilation © Royal Economic Society 2009.

Suggested Citation

  • Simon Cowan, 2010. "The Welfare Economics of Optional Water Metering," Economic Journal, Royal Economic Society, vol. 120(545), pages 800-815, June.
  • Handle: RePEc:ecj:econjl:v:120:y:2010:i:545:p:800-815
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    File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1468-0297.2009.02307.x
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    Cited by:

    1. Neder, Ángel Enrique & Ceballos Ferroglio, Carlos Fernando, 2010. "Determinación de los beneficios del sistema de tarifación volumétrico para el servicio de agua potable en la localidad de La Calera, Córdoba, Argentina/Benefits Determination of Volumetric Pricing Sys," Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 28, pages 405-422, Agosto.
    2. Tatsuki Ueda & Peter Moffatt, 2013. "A Socially Efficient Water Tariff Under the English Optional Metering Scheme," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 54(4), pages 495-523, April.

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