Critical Factors for Achieving Multiple Goals with Water Tariff Systems

Price instruments are well known policy handles to influence effectively residential water demand. Prices used to beset by water authorities in such a way that the principle of cost coverage was respected; they acted as prominentinstruments in residential water policies in the past decades. More recently however, price instruments areincreasingly used to meet simultaneously financial, environmental and social goals. This paper addresses fourconditions for an appropriate tariff system for residential water use which are often found in the recent literatureon the economics of water use. The paper analyzes the importance of background factors (e.g., low wateravailability) of these four principles as well as the extent to which actual tariff systems are employed in five,mutually contrasting cities (Amsterdam, Athens, London, Seville and Tel Aviv). Meta-analytic techniques - inparticular, rough set analysis stemming from artificial intelligence - are applied to identify the common underlyingrelations between background factors and success of achieving multiple goals in these five urban case studies. Thepaper concludes with policy recommendations.