Investigating affordability problems of utility services - a theoretical study on the ratio measure
Unlike in developing countries, there tends to be no problem of access to water, electricity, and heating for private households in transition countries. However, transition countries have a considerable amount of low-income households, and the problem of affordability of these environmental-related utility services remains urgent. Welfare economics literature suggests to neglect affordability aspects by separating allocative from distributive impacts of pricing. In practice, this separation runs the risk of rendering impossible any sustainability-oriented price reform. An Institutional Economics approach takes competing objectives into account. From this viewpoint it appears to be worth investigating the affordability-concept. Although the affordability-related research has escalated remarkably in recent years, the theoretical contributions are still limited. Hence, we focus on the simple ratio measure often used in practice. We analyze the arguments speaking for the 'potential affordability approach'. But we find that - within that approach - adhering formally to the ratio measure is possible only under conditions that make no sense regarding the concern of the measure. Thus for most cases the ratio measure is misleading. Some considerations on practical use for governance conclude the paper.
|Date of creation:||2010|
|Contact details of provider:|| Postal: Theodor-Lieser-Strasse 2, 06120 Halle(Saale)|
Phone: (+49) (0) 345 / 29 28 0
Fax: (+49) (0) 345 / 29 28 199
Web page: http://www.iamo.de/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kessides, Ioannis & Miniaci, Raffaele & Scarpa, Carlo & Valbonesi, Paola, 2009. "Toward defining and measuring the affordability of public utility services," Policy Research Working Paper Series 4915, The World Bank.
- Raffaele Miniaci & Carlo Scarpa & Paola Valbonesi, 2008. "Measuring The Affordability Of Basic Public Utility Services In Italy," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 67(2), pages 185-230, July.
- Sherry A. Glied, 2008. "Mandates and the Affordability of Health Care," NBER Working Papers 14545, National Bureau of Economic Research, Inc.
When requesting a correction, please mention this item's handle: RePEc:zbw:iamo10:52714. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.