Increasing block tariffs seek a cross-subsidy mechanism between the water network users, based on the common assumption of a low water price elasticity. In Manaus, the capital city of the Brazilian state of Amazonas, where most of the 1.6 million dwellers are supplied through a municipal water network, a substantial consumption drop followed the tariff increase of 2004. This drop questions the cross-subsidy capacity of the current structure. We see this 31.51% tariff increase as a natural experiment applied to the whole network user population of Manaus, and this allows us to measure the impact on monthly consumption of metered households, using month-on-month differences between years 2003 and 2004.
Research Article|January 04 2010
Water tariffs and consumption drop: an evaluation of households' response to a water tariff increase in Manaus, Brazil
Anne Olivier; Water tariffs and consumption drop: an evaluation of households' response to a water tariff increase in Manaus, Brazil. Water Policy 1 August 2010; 12 (4): 564–588. doi: https://doi.org/10.2166/wp.2010.045
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