J.M. Dalhuisen

Price and Income Elasticities of Residential Water Demand: A Meta-Analysis

This article presents a meta-analysis of variations in price and income elasticities of residential water demand. Meta-analysis constitutes an adequate tool to synthesize research results by means of an analysis of the variation in empirical estimates reported in the literature. We link the variation in estimated elasticities to differences in theoretical microeconomic choice approaches, differences in spatial and temporal dynamics, as well as differences in research design of the underlying studies. The occurrence of increasing or decreasing block rate systems turns out to be important. With respect to price elasticities, the use of the discrete-continuous choice approach is relevant in explaining observed differences. (JEL H31, Q25)

Economic aspects of sustainable water use: evidence from a horizontal comparison of European cities

This paper addresses the economics of sustainable water use. It focuses on the possibilities for pricing instruments, privatisation and liberalisation to contribute to a (more) sustainable water use. The paper starts with a theoretical discussion analysing the principles of an optimal tariff system, the responsiveness of consumers to price changes, the four principles of an optimal tariff system, concepts such as social and full cost recovery, and the possibilities and desirability of changing governance structures taking into account the specific characteristics of the water sector. Next, the key issues derived from the theoretical analysis are illustrated on the basis of an empirical study on five European metropolitan areas. For these cities, tariff structures and governance structures will be described and analysed in order to assess the degree of sustainability. The comparison of the cities ultimately results in policy recommendations for improving the sustainability of water use in urban areas.

Labour manoeuvrability and economic performance: A test on township village enterprises in China

Purpose - The aim of this paper is to explain the relationship between economic performance and labour manoeuvrability of township-village enterprises in the Jiangsu province, Peoples Republic of China. Design/methodology/approach - After a concise general overview of recent economic developments in the Chinese economy and the functioning of labour markets, a statistical analysis was performed on economic performance and labour market conditions based on a sample of 103 enterprises in the area considered. Findings - The analysis shows that the flexibility to fire employees has a considerable impact on the rise in added value of the enterprises, whereas hiring flexibility appears to have negligible effects. Research limitations/implications - Although the paper has a limited scope related to one Chinese province, it seems plausible that the results – a positive economic effect of deregulation – have a more general validity, but this would call for a broader comparative study across sectors and regions. Originality/value - The paper thus offers a novel contribution to a better understanding of the economic performance after the fast changes in the Chinese economy.

Regulatory impacts on sustainable drinking water supply: a comparative study on Dutch water companies

Regulatory changes have exerted deep impacts on public service provision. This paper aims to disentangle recent differences in the external production circumstances of Dutch regional water companies in order to identify the crucial regulatory factors influencing the supply of water to various users in the distribution area of the water company concerned. The analysis is carried out for various types of water companies by means of an analysis of variance (ANOVA), while the consequences for individual water companies are examined by using a rough set analysis (a recent artificial intelligence method). The increase of investments in the network, the institutional-legal form of the company and the number of connections per km of network appear to be the most important characteristics of the differences in the actual efficiency of water supply per connection.

Economic Market instruments and sustainable urban water use

Water is an economic good and as such has as a value to a spectrum of users, who are willing to pay for it. Consumers will use water until the marginal costs exceed the marginal benefits from use of an additional cubic meter of water. Similarly, producers will supply water until the marginal costs exceed the marginal return of an additional cubic meter of water supplied. This article surveys the insights on the desirability and possibilities for using economic policy instruments to attain a sustainable use of water. Special attention will be paid to the scope and viability of price instruments as well as to privatisation and liberalisation of the sector, since these issues feature prominently in the current policy debate. To this aim, we will offer a stylised picture of the water market for end users by devoting particular attention to the relevant characteristics of demand and supply, including market failures that warrant government intervention to regulate the market. Next, the focus is shifted to the possibilities of influencing supply and demand such that the market for water satisfies basic sustainability criteria.