Water Markets, Demand and Cost Recovery for Piped Water Supply Services : Evidence from Southwest Sri Lanka

In many countries water supply is a service that is seriously underpriced, especially for residential consumers. This has led to a call for setting cost recovery policies to ensure that the tariffs charged for water supply cover the full cost of providing for the service. Yet, the question arises on...

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Main Authors: Nauges, Celine, van den Berg, Caroline
Format: Policy Research Working Paper
Language:English
Published: World Bank, Washington, DC 2012
Subjects:
Online Access:http://documents.worldbank.org/curated/en/2006/06/6858795/water-markets-demand-cost-recovery-piped-water-supply-services-evidence-southwest-sri-lanka-water-markets-demand-cost-recovery-piped-water-supply-services-evidence-southwest-sri-lanka
http://hdl.handle.net/10986/8445
id okr-10986-8445
recordtype oai_dc
spelling okr-10986-84452021-04-23T14:02:41Z Water Markets, Demand and Cost Recovery for Piped Water Supply Services : Evidence from Southwest Sri Lanka Nauges, Celine van den Berg, Caroline ACCESS TO SAFE WATER ALTERNATIVE WATER SOURCES BLOCK PRICING BLOCK RATE BLOCK RATE STRUCTURE CONSTRUCTION CONTINGENT VALUATION COST RECOVERY COST RECOVERY POLICIES CUBIC METER CUBIC METERS DELIVERY OF WATER DELIVERY OF WATER SUPPLY DEMAND FOR WATER DISTRIBUTION OF WATER DISTRIBUTION SYSTEM FIXED COSTS FIXED FEE HAND PUMP HOUSE CONNECTION HOUSEHOLD HOUSEHOLD INCOME HOUSEHOLDS LITRES PER DAY LOW-INCOME HOUSEHOLDS METER INSTALLATION MONTHLY WATER BILL MONTHLY WATER USE PIPE LAYING PIPED WATER POOR WATER QUALITY PRICE ELASTICITIES PRICE ELASTICITY PRIVATE WELLS PUBLIC WELLS PUMPS QUALITY OF WATER RAINWATER RESIDENTIAL CONSUMERS SANITATION SERVICES SERVICE AREA SERVICE PROVISION SURFACE WATER TARIFF STRUCTURE TOILETS TOWN TOWNS TYPE OF CONNECTION UTILITIES UTILITY SERVICES WATER WATER AVAILABILITY WATER CONSUMPTION WATER DEMAND WATER DEMAND FUNCTIONS WATER DEPARTMENT WATER DISTRIBUTION WATER DISTRIBUTION SYSTEM WATER MARKETS WATER PARTNERSHIP WATER PRESSURE WATER SERVICE WATER SOURCE WATER SOURCES WATER SUPPLY WATER SUPPLY SERVICES WATER TARIFF WATER TARIFFS WATER TREATMENT WATER USE WELLS In many countries water supply is a service that is seriously underpriced, especially for residential consumers. This has led to a call for setting cost recovery policies to ensure that the tariffs charged for water supply cover the full cost of providing for the service. Yet, the question arises on how consumers will react to such price increases. The authors illustrate the impact of price increases on consumption of piped water through a study of the demand for water of piped and non-piped households using cross-sectional data from 1,800 households in Southwest Sri Lanka. The (marginal) price elasticity is estimated at -0.74 for households exclusively relying on piped water, and at -0.69 for households using piped water but supplementing their supply with other water sources, with no significant differences between income groups. Those households that depend on non-piped water sources have a time cost elasticity (as a proxy for price elasticity) of only -0.06. The authors discuss the implications of these results in terms of pricing policy. 2012-06-19T18:04:05Z 2012-06-19T18:04:05Z 2006-06 http://documents.worldbank.org/curated/en/2006/06/6858795/water-markets-demand-cost-recovery-piped-water-supply-services-evidence-southwest-sri-lanka-water-markets-demand-cost-recovery-piped-water-supply-services-evidence-southwest-sri-lanka http://hdl.handle.net/10986/8445 English Policy Research Working Paper; No. 3941 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research South Asia Sri Lanka
repository_type Digital Repository
institution_category Foreign Institution
institution Digital Repositories
building World Bank Open Knowledge Repository
collection World Bank
language English
topic ACCESS TO SAFE WATER
ALTERNATIVE WATER SOURCES
BLOCK PRICING
BLOCK RATE
BLOCK RATE STRUCTURE
CONSTRUCTION
CONTINGENT VALUATION
COST RECOVERY
COST RECOVERY POLICIES
CUBIC METER
CUBIC METERS
DELIVERY OF WATER
DELIVERY OF WATER SUPPLY
DEMAND FOR WATER
DISTRIBUTION OF WATER
DISTRIBUTION SYSTEM
FIXED COSTS
FIXED FEE
HAND PUMP
HOUSE CONNECTION
HOUSEHOLD
HOUSEHOLD INCOME
HOUSEHOLDS
LITRES PER DAY
LOW-INCOME HOUSEHOLDS
METER INSTALLATION
MONTHLY WATER BILL
MONTHLY WATER USE
PIPE LAYING
PIPED WATER
POOR WATER QUALITY
PRICE ELASTICITIES
PRICE ELASTICITY
PRIVATE WELLS
PUBLIC WELLS
PUMPS
QUALITY OF WATER
RAINWATER
RESIDENTIAL CONSUMERS
SANITATION SERVICES
SERVICE AREA
SERVICE PROVISION
SURFACE WATER
TARIFF STRUCTURE
TOILETS
TOWN
TOWNS
TYPE OF CONNECTION
UTILITIES
UTILITY SERVICES
WATER
WATER AVAILABILITY
WATER CONSUMPTION
WATER DEMAND
WATER DEMAND FUNCTIONS
WATER DEPARTMENT
WATER DISTRIBUTION
WATER DISTRIBUTION SYSTEM
WATER MARKETS
WATER PARTNERSHIP
WATER PRESSURE
WATER SERVICE
WATER SOURCE
WATER SOURCES
WATER SUPPLY
WATER SUPPLY SERVICES
WATER TARIFF
WATER TARIFFS
WATER TREATMENT
WATER USE
WELLS
spellingShingle ACCESS TO SAFE WATER
ALTERNATIVE WATER SOURCES
BLOCK PRICING
BLOCK RATE
BLOCK RATE STRUCTURE
CONSTRUCTION
CONTINGENT VALUATION
COST RECOVERY
COST RECOVERY POLICIES
CUBIC METER
CUBIC METERS
DELIVERY OF WATER
DELIVERY OF WATER SUPPLY
DEMAND FOR WATER
DISTRIBUTION OF WATER
DISTRIBUTION SYSTEM
FIXED COSTS
FIXED FEE
HAND PUMP
HOUSE CONNECTION
HOUSEHOLD
HOUSEHOLD INCOME
HOUSEHOLDS
LITRES PER DAY
LOW-INCOME HOUSEHOLDS
METER INSTALLATION
MONTHLY WATER BILL
MONTHLY WATER USE
PIPE LAYING
PIPED WATER
POOR WATER QUALITY
PRICE ELASTICITIES
PRICE ELASTICITY
PRIVATE WELLS
PUBLIC WELLS
PUMPS
QUALITY OF WATER
RAINWATER
RESIDENTIAL CONSUMERS
SANITATION SERVICES
SERVICE AREA
SERVICE PROVISION
SURFACE WATER
TARIFF STRUCTURE
TOILETS
TOWN
TOWNS
TYPE OF CONNECTION
UTILITIES
UTILITY SERVICES
WATER
WATER AVAILABILITY
WATER CONSUMPTION
WATER DEMAND
WATER DEMAND FUNCTIONS
WATER DEPARTMENT
WATER DISTRIBUTION
WATER DISTRIBUTION SYSTEM
WATER MARKETS
WATER PARTNERSHIP
WATER PRESSURE
WATER SERVICE
WATER SOURCE
WATER SOURCES
WATER SUPPLY
WATER SUPPLY SERVICES
WATER TARIFF
WATER TARIFFS
WATER TREATMENT
WATER USE
WELLS
Nauges, Celine
van den Berg, Caroline
Water Markets, Demand and Cost Recovery for Piped Water Supply Services : Evidence from Southwest Sri Lanka
geographic_facet South Asia
Sri Lanka
relation Policy Research Working Paper; No. 3941
description In many countries water supply is a service that is seriously underpriced, especially for residential consumers. This has led to a call for setting cost recovery policies to ensure that the tariffs charged for water supply cover the full cost of providing for the service. Yet, the question arises on how consumers will react to such price increases. The authors illustrate the impact of price increases on consumption of piped water through a study of the demand for water of piped and non-piped households using cross-sectional data from 1,800 households in Southwest Sri Lanka. The (marginal) price elasticity is estimated at -0.74 for households exclusively relying on piped water, and at -0.69 for households using piped water but supplementing their supply with other water sources, with no significant differences between income groups. Those households that depend on non-piped water sources have a time cost elasticity (as a proxy for price elasticity) of only -0.06. The authors discuss the implications of these results in terms of pricing policy.
format Publications & Research :: Policy Research Working Paper
author Nauges, Celine
van den Berg, Caroline
author_facet Nauges, Celine
van den Berg, Caroline
author_sort Nauges, Celine
title Water Markets, Demand and Cost Recovery for Piped Water Supply Services : Evidence from Southwest Sri Lanka
title_short Water Markets, Demand and Cost Recovery for Piped Water Supply Services : Evidence from Southwest Sri Lanka
title_full Water Markets, Demand and Cost Recovery for Piped Water Supply Services : Evidence from Southwest Sri Lanka
title_fullStr Water Markets, Demand and Cost Recovery for Piped Water Supply Services : Evidence from Southwest Sri Lanka
title_full_unstemmed Water Markets, Demand and Cost Recovery for Piped Water Supply Services : Evidence from Southwest Sri Lanka
title_sort water markets, demand and cost recovery for piped water supply services : evidence from southwest sri lanka
publisher World Bank, Washington, DC
publishDate 2012
url http://documents.worldbank.org/curated/en/2006/06/6858795/water-markets-demand-cost-recovery-piped-water-supply-services-evidence-southwest-sri-lanka-water-markets-demand-cost-recovery-piped-water-supply-services-evidence-southwest-sri-lanka
http://hdl.handle.net/10986/8445
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