IDEAS home Printed from https://ideas.repec.org/p/hal/journl/hal-05143769.html

Water pricing and markets : Principles, practices and proposals

Author

Listed:
  • Sarah Wheeler

    (Flinders University of South Australia, University of Adelaide)

  • Céline Nauges

    (TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • R. Quentin Grafton

    (ANU - Australian National University)

Abstract

The allocation of water across space and time is a key challenge of water governance, with demand and supply often not well matched over time and place. Best practice water pricing and markets may promote water conservation, yet their application is limited. We highlight the governance principles needed for best practice water pricing and water markets, describe differences across regions, and provide six key water demand governance recommendations, for both Global North and Global South countries.

Suggested Citation

  • Sarah Wheeler & Céline Nauges & R. Quentin Grafton, 2025. "Water pricing and markets : Principles, practices and proposals," Post-Print hal-05143769, HAL.
    • Handle: RePEc:hal:journl:hal-05143769
    DOI: 10.1002/aepp.13505
    Note: View the original document on HAL open archive server: https://hal.science/hal-05143769v1
    as

    Download full text from publisher

    File URL: https://hal.science/hal-05143769v1/document
    Download Restriction: no
    File URL: https://libkey.io/10.1002/aepp.13505?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Guillaume Gruère & Makiko Shigemitsu & Scarlett Crawford, 2020. "Agriculture and water policy changes: Stocktaking and alignment with OECD and G20 recommendations," OECD Food, Agriculture and Fisheries Papers 144, OECD Publishing.
    2. Céline Nauges & Sarah Ann Wheeler & Alec Zuo, 2016. "Elicitation of irrigators' risk preferences from observed behaviour," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 60(3), pages 442-458, July.
    3. Wichman, Casey J., 2017. "Information provision and consumer behavior: A natural experiment in billing frequency," Journal of Public Economics, Elsevier, vol. 152(C), pages 13-33.
    4. Allan Cain, 2018. "Informal water markets and community management in peri-urban Luanda, Angola," Water International, Taylor & Francis Journals, vol. 43(2), pages 205-216, February.
    5. Martin Keulertz & Phil Riddell, 2022. "Chronic crisis: 30 years on from the Dublin Principles and still no market to value water," Water International, Taylor & Francis Journals, vol. 47(7), pages 1048-1059, October.
    6. Sarah Ann Wheeler & Dustin E Garrick, 2020. "A tale of two water markets in Australia: lessons for understanding participation in formal water markets," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 36(1), pages 132-153.
    7. Dinar, Ariel & Rosegrant, Mark W. & Meinzen-Dick, Ruth, 1997. "Water allocation mechanisms : principles and examples," Policy Research Working Paper Series 1779, The World Bank.
    8. Céline Nauges & Dale Whittington, 2010. "Estimation of Water Demand in Developing Countries: An Overview," The World Bank Research Observer, World Bank, vol. 25(2), pages 263-294, August.
    9. Mottaleb, Khondoker A. & Krupnik, Timothy J. & Keil, Alwin & Erenstein, Olaf, 2019. "Understanding clients, providers and the institutional dimensions of irrigation services in developing countries: A study of water markets in Bangladesh," Agricultural Water Management, Elsevier, vol. 222(C), pages 242-253.
    10. Zekri, Slim & Easter, William, 2005. "Estimating the potential gains from water markets: a case study from Tunisia," Agricultural Water Management, Elsevier, vol. 72(3), pages 161-175, April.
    11. Guillaume Gruère & Makiko Shigemitsu, 2021. "Measuring progress in agricultural water management: Challenges and practical options," OECD Food, Agriculture and Fisheries Papers 162, OECD Publishing.
    12. Garrick, D. & De Stefano, L. & Yu, Winston & Jorgensen, I. & O’Donnell, E. & Turley, L. & Aguilar-Barajas, I. & Dai, X. & de Souza Leao, R. & Punjabi, B. & Schreiner, B. & Svensson, J. & Wight, C., 2019. "Rural water for thirsty cities: a systematic review of water reallocation from rural to urban regions," Papers published in Journals (Open Access), International Water Management Institute, pages 1-14(4):043.
    13. Nauges, Celine & Whittington, Dale, 2017. "Evaluating the Performance of Alternative Municipal Water Tariff Designs: Quantifying the Tradeoffs between Equity, Economic Efficiency, and Cost Recovery," World Development, Elsevier, vol. 91(C), pages 125-143.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Chen, Yuqing & Wyrwoll, Paul & Burnett, Peter & Grafton, R. Quentin & Vardon, Michael, 2025. "Valuing and accounting for water-related ecosystem services for water pricing and management: An Australian case study," Ecosystem Services, Elsevier, vol. 75(C).
    2. Ping Qin & Jun Li & Yu Qin & Jie-Sheng Tan-Soo, 2025. "Tariff familiarity sustains household water conservation," Nature Communications, Nature, vol. 16(1), pages 1-11, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sarah Ann Wheeler & Céline Nauges & R. Quentin Grafton, 2025. "Water pricing and markets: Principles, practices and proposals," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 47(2), pages 487-514, May.
    2. Roberto Balado‐Naves & María A. García‐Valiñas & David Roibás Alonso, 2025. "Assessing the efficiency of residential water demand: The role of information," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 47(2), pages 556-585, May.
    3. Céline Nauges & Dale Whittington, 2019. "Social Norms Information Treatments in the Municipal Water Supply Sector: Some New Insights on Benefits and Costs," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 5(03), pages 1-40, July.
    4. Wheeler, Sarah Ann, 2022. "Debunking Murray-Darling Basin water trade myths," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 66(04), January.
    5. María Ángeles García-Valiñas & Sara Suárez-Fernández, 2022. "Are Economic Tools Useful to Manage Residential Water Demand? A Review of Old Issues and Emerging Topics," Post-Print hal-04067487, HAL.
    6. Fuente, David & Kabubo-Mariara, Jane & Kimuyu, Peter & Mwaura, Mbutu & Whittington, Dale, 2017. "Assessing the Performance of Alternative Water and Sanitation Tariffs: The Case of Nairobi, Kenya," EfD Discussion Paper 17-21, Environment for Development, University of Gothenburg.
    7. Ramón Barberán & Julio López-Laborda & Fernando Rodrigo, 2022. "The Perception of Residential Water Tariff, Consumption, and Cost: Evidence of its Determinants Using Survey Data," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 36(9), pages 2933-2952, July.
    8. María Á. García-Valiñas & Roberto Martínez-Espiñeira & Marta Suárez-Varela Maciá, 2021. "Price and Consumption Misperception Profiles: The Role of Information in the Residential Water Sector," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 80(4), pages 821-857, December.
    9. Bajaj, Akshi & Singh, S.P. & Nayak, Diptimayee, 2022. "Impact of water markets on equity and efficiency in irrigation water use: A systematic review and meta-analysis," Agricultural Water Management, Elsevier, vol. 259(C).
    10. Blanco-Gutiérrez, Irene & Varela-Ortega, Consuelo & Flichman, Guillermo, 2011. "Cost-effectiveness of groundwater conservation measures: A multi-level analysis with policy implications," Agricultural Water Management, Elsevier, vol. 98(4), pages 639-652, February.
    11. Liang Lu & David Deller & Morten Hviid, 2018. "Price and Behavioural Signals to Encourage Household Water Conservation in Temperate Climates," Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) 2018-01, Centre for Competition Policy, University of East Anglia, Norwich, UK..
    12. Marie-Estelle Binet & Maria Garcia-Valiñas & Sara Suarez-Fernandez, 2024. "Nudges in sustainable water management practices: Implementation, key findings and research agenda," Post-Print halshs-04567861, HAL.
    13. Zuo, Alec & Wheeler, Sarah Ann & Xu, Ying, 2022. "Expanders, diversifiers or downsizers? Identifying clusters of irrigators’ water trade and farm management strategies in Australia," Agricultural Water Management, Elsevier, vol. 264(C).
    14. Duan, Yeqing & Zhou, Shenbei & He, Jiangping & Bai, Minghao, 2024. "Improving the performance of agricultural temporary water markets: The role of technology-based and transaction-based subsidies," Agricultural Water Management, Elsevier, vol. 303(C).
    15. Leonardo-Fabio Morales & Mauricio Quiñones & Eleonora Dávalos & Luis-Felipe Gaviria, 2025. "Spatial spillover effects in the labour market in a middle-income country," Spatial Economic Analysis, Taylor & Francis Journals, vol. 20(1), pages 53-71, January.
    16. Sarah Ann Wheeler & Céline Nauges & Alec Zuo, 2021. "How stable are Australian farmers’ climate change risk perceptions? New evidence of the feedback loop between risk perceptions and behaviour," Post-Print hal-03198062, HAL.
    17. Araceli Martin-Candilejo & Francisco J. Martin-Carrasco & Ana Iglesias & Luis Garrote, 2023. "Heading into the Unknown? Exploring Sustainable Drought Management in the Mediterranean Region," Sustainability, MDPI, vol. 16(1), pages 1-18, December.
    18. Valery Vilisov, 2015. "Managing Cellular Billing Plan Switchings," Papers 1509.05943, arXiv.org.
    19. Liang Lu & David Deller & Morten Hviid, 2019. "Price and Behavioural Signals to Encourage Household Water Conservation: Implications for the UK," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 33(2), pages 475-491, January.
    20. Andor, Mark A. & Gerster, Andreas & Peters, Jörg & Schmidt, Christoph M., 2020. "Social Norms and Energy Conservation Beyond the US," Journal of Environmental Economics and Management, Elsevier, vol. 103(C).

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:journl:hal-05143769. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.