Effectiveness of two pricing structures on urban water use and conservation: a quasi-experimental investigation
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Residential water demand management using price and non-price measures to conserve water has gained considerable international attention from water utilities over the last few decades. The objective of this paper is to explore the effectiveness of different pricing schemes on water conservation. In this study, we compare the ‘conservation-orientedness’ of two pricing schemes. These are a uniform pricing scheme and an increasing block tariff scheme (IBT) structure. A quasi-experimental method is used for this purpose involving 150 suburbs in the Brisbane City Council (BCC) in Queensland, Australia for a 4-year period between 2005 and 2008. Our results show there are more conservation benefits associated with an IBT pricing scheme than a uniform pricing scheme.
KeywordsDemand for residential water Increasing block rates Conservation Quasi-experiment Pricing schemes Efficiency Australia
The authors would like to thank Australian Research Council (ARC) for financial support (Grant number DP0988254).
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