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 65994
Title Block Rate Pricing of Water in Indonesia : An Analysis of Welfare Effects
Author(s) Rouwendal, J.; Rietveld, P.; Zwart, B.
Source Bulletin of Indonesian Economic Studies 36 (2000). - ISSN 0007-4918 - p. 73 - 92.
DOI http://dx.doi.org/10.1080/00074910012331338983
Department(s) Economics of Consumers and Households Group
MGS
Publication type Refereed Article in a scientific journal
Publication year 2000
Abstract Block rate pricing of piped water in Indonesian cities has a progressive structure: the marginal price paid increases with the volume of demand. This paper estimates household water demand in Salatiga city using the Burtless and Hausman model, and finds that its distribution is not unimodal—that data cluster around kinks. The main estimation results are a price elasticity of approximately –1.2 and an income elasticity of 0.05. These elasticities are mutually dependent. The estimated model is used to investigate the social welfare consequences of a shift to uniform pricing. The principal beneficiaries would be large households, which are not necessarily wealthy. While replacing the complex rate structure by a uniform marginal price would have positive effects on average welfare, the equity consequences would be small. To improve equity, water companies could reduce installation fees, giving low-income households access to water connections, or reinvest profits in network expansion to unserviced areas.
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