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The Economics of Equity and Affordability in Residential Water Pricing

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  • Casey J. Wichman

    (School of Economics, Georgia Institute of Technology, 221 Bobby Dodd Way, Atlanta, GA 30332, USA2Resources for the Future, 1616 P Street NW, Washington, DC 20036, USA)

Abstract

In this review, I explore the economic dimensions of equity and affordability in urban residential water pricing. I summarize the growing literature on water affordability and discuss its relationship to more common studies of distributional issues in water demand. I also explore how utilities use various rate structures, such as increasing block rates, to address affordability concerns, emphasizing empirical evidence on the ineffectiveness of these rate structures in achieving equity goals. Moreover, I discuss the design of customer assistance programs in alleviating burdens on low-income households and summarize the scant evidence of the effectiveness of these programs. Ultimately, I highlight the need for more empirical evaluations of equity-focused programs and a greater focus on the distributional consequences of water management strategies to ensure equitable access to this essential resource.

Suggested Citation

  • Casey J. Wichman, 2025. "The Economics of Equity and Affordability in Residential Water Pricing," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 11(02), pages 1-29, June.
    • Handle: RePEc:wsi:wepxxx:v:11:y:2025:i:02:n:s2382624x25300026
    DOI: 10.1142/S2382624X25300026
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    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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