Determinants of Household Payments for Drinking Water in Mexico, with Equity Considerations

Abstract

The situation with non-payment of the drinking water services that households receive is an increasingly common problem with significant financial implications. The principal determinants of this lack of payment was estimated using a probabilistic model for the case of Mexico, with consideration of equity among household deciles. The results show that while this problem can be associated with households belonging to lower deciles, those in upper deciles are responsible for nearly the same share of the financial impact on water management organizations, and consequently, on the wellbeing of society. Nevertheless, households in the first deciles have more reasonable motives for deciding not to pay. Therefore, when wanting to develop policy incentives for households to pay for drinking water services, the incentives should be differentiated according to socioeconomic strata.