The Limits of Water Pricing in a Developing Country Metropolis: Empirical Lessons from an Industrial City of Pakistan

Abstract

This paper seeks to question the effectiveness of water pricing as a means of consumer behavioural change in urban centres of the Global South by analysing the domestic usage for water in a major industrial city of Pakistan. Using survey data of 1100 households from Faisalabad city, we estimate the price and income elasticities of water demand. Instrumental variable methods are applied to overcome the endogeneity issues of water pricing. The findings reflect that price and income elasticities vary across different groups. Price elasticities range from −0.43 to −0.71, and income elasticities vary between 0.01 and 0.12. These findings suggest that pricing policies may have limited scope to drive households' water consumption patterns. However, these empirics may suggest that policy makers should design an appropriate tariff structure to increase revenues that can be invested to further improve the existing water infrastructure. The study findings also suggest that non-pricing instruments, such as water saving campaigns, may be helpful in driving an efficient use of water in rapidly growing cities in the developing world.

Evidence of Economically Sustainable Village-Scale Microenterprises for Arsenic Remediation in Developing Countries

“…Tariff-demand correlations from field data were similar to correlations from past studies and produced similar results. 58,59 Input distributions from real field systems that were used for simulations are summarized in SI Figure S2A−E and SI Table S2. Typical values for system CapEx and OpEx-number of households, monthly tariffs, caretaker and delivery wages, and operational expenses (electricity, monthly servicing, waste management, and regeneration)-are available in SI Table S2.…”

“…Hybrid ion exchangers or HIX-Nano materials are comprised of a polymeric anion exchange resin support that is dispersed with metal oxide nanoparticles (e.g., iron, zirconium) both within the macropores and the gel phase. − HIX-Nano was commercialized over a decade ago because of its synergy of high capacity, high reusability and consequent reduction in the cost of treated water for arsenic, fluoride, and phosphate removal. ,,− Arsenic removed from groundwater is converted into solids (sludge) of ferric hydroxide that are contained over an aerated coarse filter under an oxidizing environment. Continued research and field-scale applications in India, Cambodia, Bangladesh, and Nepal have created robust and simple-to-apply sludge containment protocols in rural communities to ensure environmental compatibility and public safety. − In addition to robustness and high capacity, the reusability of HIX-Nano makes the process conducive to long-term application in developing countries due to lesser dependence on supply of the adsorbent material. Several community-based systems are in operation for more than a decade and HIX-Nano materials are now produced in India.…”

Socio-Hydrological Modelling to Assess Reliability of an Urban Water System under Formal-Informal Supply Dynamics

“…This represents formal and informal water supply dynamics for the city of Hyderabad. These processes are generalizable to other urban areas in Pakistan, including Faisalabad [27], and secondary cities in the lower Indus basin including Sukkur, Thatta and Badin [28], which rely solely on surface water (i.e., Indus River and Chenab River), due to the poor quality of groundwater. R1, R2, and R3 represent reinforcing processes and B1 and B2 refer to balancing processes or negative loops.…”

Water Economics and Policy

“…A water pricing scheme for irrigation water in conditions of unmetered water use is the measure that Lika et al [19] evaluate with a principal-agent model. Fang et al [20] apply a computable general equilibrium model to quantify the performance and potential economic impacts of discharge tariffs, and Ahmad et al [21] study the limits of water pricing in a developing country metropolis. Finally, Montilla-López et al [22] review the worldwide use of water banks as a re-allocation mechanism of water rights.…”