Critical factors for achieving multiple goals with water tariff systems: Combining limited data sources and expert testimony

Abstract

Price instruments are well-known policy handles to influence effectively residential water demand. Prices used to be set by water authorities in such a way that the principle of cost coverage was respected; they acted as prominent instruments in residential water policies in the past decades. More recently, however, price instruments are increasingly used to meet simultaneously financial, environmental, and social goals. This paper addresses four conditions for an appropriate tariff system for residential water use which are often found in the recent literature on the economics of water use. The paper analyzes the importance of background factors (e.g., low water availability) of these four principles as well as the extent to which actual tariff systems are employed in five mutually contrasting cities (Amsterdam, Athens, London, Seville, and Tel Aviv). Meta-analytic techniques, in particular, rough set analysis stemming from artificial intelligence, are applied to identify the common underlying relations between background factors and success of achieving multiple goals in these five urban case studies. The paper concludes with policy recommendations.