David Zetland

A Global Survey of Urban Water Tariffs — Are They Sustainable, Efficient and Fair?

This paper examines the relations between tariffs and sustainability, efficiency and equity, using a unique data-set for 308 cities in 102 countries. Higher water tariffs are correlated with lower per capita consumption, smaller local populations, lower water availability, higher demand and a lower risk of shortage. Aggregating to the national level, higher tariffs are correlated with higher GDP and better governance. A different country-level analysis shows that a higher percentage of the population with water service is correlated with better governance, higher GDP and a greater risk of water shortage. The relation between water prices and service coverage is statistically inconsistent.

The Life and Death of the Dutch Groundwater Tax

We examine the Dutch national groundwater tax (GWT) – a ‘win–win, green’ tax that promised to reduce distortions by simultaneously reducing the income tax burden and improving environmental outcomes. We find no evidence of these impacts. Instead, we see that the GWT increased distortions by taxing a narrow base (a few drinking-water companies reliant on raw groundwater) and interfering with groundwater management programmes funded by an existing provincial groundwater fee. The Dutch government revoked the GWT for being fiscally inefficient and environmentally unhelpful on 31 December 2011, but this story provides some useful lessons.

An Auction Market for Journal Articles

We recommend that an auction market replace the current system for submitting academic papers and show a strict Pareto-improvement in equilibrium. Besides the benefit of speed, this mechanism increases the average quality of articles and journals and rewards editors and referees for their effort. The “academic dollar” proceeds from papers sold at auction go to authors, editors and referees of cited articles. This nonpecuniary income indicates the academic impact of an article—facilitating decisions on tenure and promotion. This auction market does not require more work of editors.

Desalination and the commons : tragedy or triumph?

Abstract A policy is more likely to be economically efficient when its costs and benefits fall on the same group, but politicians can allocate costs and benefits to different groups within their jurisdictional commons. This article examines the distribution of costs and benefits from desalination projects using examples from San Diego, Almería and Riyadh. The examples illustrate how mismatches between costs and benefits can persist or change as politicians adjust the policy portfolio to balance inefficiency and political risk.

RATIONAL WASTE: THE POLITICAL-ECONOMY OF DESALINATION

This paper explores the economic and political dimensions of re- sponding to water scarcity by increasing supply rather than reducing demand with examples from San Diego (US), Almer a (ES) and Riyadh (SA). Each case explains how leaders benet by obscuring the costs of desalinated supplies. In San Diego, marginal costs are diused among customers. In Almer a, they are absorbed by a government eager to reduce unsustainable groundwater use. Rulers in Saudi Arabia, meanwhile, absorb costs to diuse political unrest. Each case discusses reforms that could substitute for further desalination (greater regional trust, improved groundwater management and reduced irrigation, respectively) and complement existing desalination operations.

All-in-Auctions for Water

This paper proposes a novel mechanism for reallocating temporary water flows or permanent water rights. The All-in-Auction (AiA) increases efficiency and social welfare by reallocating water without harming water rights holders. AiAs can be used to allocate variable or diminished flows among traditional or new uses. AiAs are appropriate for use within larger organizations that distribute water among members, e.g., irrigation districts or wholesale water agencies. Members would decide when and how to use AiAs, i.e., when transaction costs are high, environmental constraints are binding, or allocation to outsiders is desired. Experimental sessions show that an AiA reallocates more units with no less efficiency that traditional two-sided auctions.

Water Rights and Human Rights: The Poor Will Not Need our Charity if We Need their Water

Each year, about 2.8 million people die due to problems with poor water supply, sanitation and hygiene. Over three-quarters of the dead are children. Some argue that a human right to clean water would improve this situation. This paper shows that human rights are not sufficient to improve access to clean water and argues that it would be more productive to distribute property rights in national waters to citizens. Because property rights --- unlike human rights --- are alienable, citizens (rich and poor) could turn some of their rights into cash that they could use to pay for clean water service. Besides this basic equity outcome, property rights would establish a price of water in proportion to its value and facilitate efficient water allocation.

Markets for Afghan Opium and Us Heroin: Modeling the Connections

This modeling project examines the short-run effects of a program wherein the United States becomes the primary buyer of opium produced in Afghanistan and thereby reduces the global supply of heroin (refined opium). The model graphically shows that supply-side intervention will result in a large decrease in short-run world heroin supply, as well as many beneficial side effects. The U.S. heroin market is neither adversely nor beneficially affected, despite a budget-neutral change in spending priorities.

Exploring Group Cooperation in the Provision of Public Goods

A novel version of a Voluntary Contribution Mechanism game explores how participant cooperation responds to changes in payoff-relevant reference groups. In comparison to base treatment results, cooperation is greatest when players earn more from beating players in other four-person groups, but cooperation is lowest when players benefit from beating others in their own group. Additional results suggest that tournament incentives in a “large enough” group do not undermine cooperation, perhaps making it easier to incentivize behavior under a fixed budget constraint. These results suggest ways to use team incentives to provide or protect non-excludable environmental goods.A novel version of a Voluntary Contribution Mechanism game explores how participant cooperation responds to changes in payoff-relevant reference groups. In comparison to base treatment results, cooperation is greatest when players earn more from beating players in other four-person groups, but cooperation is lowest when players benefit from beating others in their own group. Additional results suggest that tournament incentives in a “large enough” group do not undermine cooperation, perhaps making it easier to incentivize behavior under a fixed budget constraint. These results suggest ways to use team incentives to provide or protect non-excludable environmental goods.

Reframing Cooperation over Public Goods

A novel version of a Voluntary Contribution Mechanism game explores how participant cooperation responds to changes in payoff-relevant reference groups. In comparison to base treatment results, cooperation is greatest when players earn more from beating players in other four-person groups, but cooperation is lowest when players benefit from beating others in their own group. Additional results suggest that tournament incentives in a “large enough” group do not undermine cooperation, perhaps making it easier to incentivize behavior under a fixed budget constraint. These results suggest ways to use team incentives to provide or protect non-excludable environmental goods.A novel version of a Voluntary Contribution Mechanism game explores how participant cooperation responds to changes in payoff-relevant reference groups. In comparison to base treatment results, cooperation is greatest when players earn more from beating players in other four-person groups, but cooperation is lowest when players benefit from beating others in their own group. Additional results suggest that tournament incentives in a “large enough” group do not undermine cooperation, perhaps making it easier to incentivize behavior under a fixed budget constraint. These results suggest ways to use team incentives to provide or protect non-excludable environmental goods.