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Pipes, Taps, and Vendors: An Integrated Water Management Approach

Author

Listed:
  • Georg Meran

    (Berlin University of Technology, Germany†DIW Berlin, Germany)

  • Markus Siehlow

    (Berlin University of Technology, Germany)

  • Christian von Hirschhausen

    (Berlin University of Technology, Germany†DIW Berlin, Germany)

Abstract

This paper applies a microeconomics-based stylized model to identify the optimal modal split of water supply infrastructure in regions of the Global South against the background of the Sustainable Development Goal (SDG) No. 6. Based on an assumed linear city, we calculate the optimal modal split of water supply. Not all water users need to be connected to a centralized, pipeline-based water supply network from an economic perspective. We calculate the optimal tap density and the optimal spatial range of households served by non-mobile or mobile water vendors for the area with unconnected households. The analysis is made for the case of water requirement (totally inelastic water demand), and afterward, the research will be extended to the case of an elastic water demand based on a Stone–Geary utility function to incorporate price and income effects. The result, an “optimal modal split†between network-based water supply and other supply options, has main implications on water tariffication. While the volumetric elements of the tariff are based on the marginal costs, the level of the access fee mainly depends on the subsistence level of water.

Suggested Citation

  • Georg Meran & Markus Siehlow & Christian von Hirschhausen, 2021. "Pipes, Taps, and Vendors: An Integrated Water Management Approach," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 7(04), pages 1-29, October.
    • Handle: RePEc:wsi:wepxxx:v:07:y:2021:i:04:n:s2382624x21500181
    DOI: 10.1142/S2382624X21500181
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    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water

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