Staff Publications

Staff Publications

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    'Staff publications' is the digital repository of Wageningen University & Research

    'Staff publications' contains references to publications authored by Wageningen University staff from 1976 onward.

    Publications authored by the staff of the Research Institutes are available from 1995 onwards.

    Full text documents are added when available. The database is updated daily and currently holds about 240,000 items, of which 72,000 in open access.

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Record number 503853
Title How should urban water be priced? – An empirical analysis for the city of Mekelle, Ethiopia
Author(s) Gezahegn, Tafesse W.; Zhu, Xueqin
Source Urban Water Journal 14 (2017)4. - ISSN 1573-062X - p. 409 - 415.
DOI http://dx.doi.org/10.1080/1573062X.2016.1175484
Department(s) Environmental Economics and Natural Resources Group
WIMEK
Publication type Refereed Article in a scientific journal
Publication year 2017
Keyword(s) Marginal social cost - marginal value - Mekelle - natural water - translog cost function
Abstract

Urban water utilities have focused on setting water prices to cover average costs, usually using increasing block rate designs. In an attempt to contribute to the use of efficient, equitable, and revenue-sufficient pricing, this paper estimates the long-run marginal and average social costs of water supply in Mekelle city using a multi-product translog cost function that incorporates the shadow price of natural water. Findings show that the marginal social costs of providing one m3 of residential and non-residential water are Birr 5.33 and 7.71 (Birr = Ethiopian currency: 1 Euro ≈ 23 Birr), respectively, while the average current prices are Birr 4.46 and 6.10/m3. On the other hand, the average social costs of residential and non-residential water are estimated at Birr 14.34 and 16.36/m3, respectively, implying that marginal social cost-based prices would still lead to a revenue deficit of approximately Birr 9/m3.

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