A global survey of urban water tariffs: are they sustainable, efficient and fair?

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.

Keywords:

• water tariff
• access to water
• shortage
• governance
• subsidies
• less developed countries

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.