Abstract
This paper examines the relations between tariffs and sustainability, efficiency and equity, using a unique data-set for 308 cities in 102 countries. Higher water tariffs are correlated with lower per capita consumption, smaller local populations, lower water availability, higher demand and a lower risk of shortage. Aggregating to the national level, higher tariffs are correlated with higher GDP and better governance. A different country-level analysis shows that a higher percentage of the population with water service is correlated with better governance, higher GDP and a greater risk of water shortage. The relation between water prices and service coverage is statistically inconsistent.
Acknowledgements
The authors thank Damian Bickett, Paul Ferraro, Merton D. Finkler, Christopher Goemans, Heather Lang, Anke Leroux, Ankit Patel, Reagan Waskom, and two referees for helpful comments.