The Welfare Economics of Optional Water Metering

16 Pages Posted: 4 Jun 2010

See all articles by Simon Cowan

Simon Cowan

University of Oxford - Department of Economics

Abstract

A model of decentralised metering decisions that applies to the water industry is developed. The social benefit of metering is higher the more sensitive demand is to the price. Allowing households to choose whether or not to have meters is efficient when only small households should have meters but does not work when the regulator does not know household characteristics and only larger households should have meters. The policy of requiring meters to be provided free, which has been adopted in England and Wales, is analysed.

Suggested Citation

Cowan, Simon G.B., The Welfare Economics of Optional Water Metering. The Economic Journal, Vol. 120, No. 545, pp. 800-815, June 2010. Available at SSRN: https://ssrn.com/abstract=1619044 or http://dx.doi.org/10.1111/j.1468-0297.2009.02307.x

Simon G.B. Cowan (Contact Author)

University of Oxford - Department of Economics ( email )

Manor Road Building
Manor Road
Oxford, OX1 3BJ
United Kingdom

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