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- Title
Water and sanitation service delivery, pricing, and the poor: An empirical estimate of subsidy incidence in Nairobi, Kenya.
- Authors
Fuente, David; Gakii Gatua, Josephine; Ikiara, Moses; Kabubo-Mariara, Jane; Mwaura, Mbutu; Whittington, Dale
- Abstract
The increasing block tariff (IBT) is among the most widely used tariffs by water utilities, particularly in developing countries. This is due in part to the perception that the IBT can effectively target subsidies to low-income households. Combining data on households' socioeconomic status and metered water use, this paper examines the distributional incidence of subsidies delivered through the IBT in Nairobi, Kenya. Contrary to conventional wisdom, we find that high-income residential and nonresidential customers receive a disproportionate share of subsidies and that subsidy targeting is poor even among households with a private metered connection. We also find that stated expenditure on water, a commonly used means of estimating water use, is a poor proxy for metered use and that previous studies on subsidy incidence underestimate the magnitude of the subsidy delivered through water tariffs. These findings have implications for both the design and evaluation of water tariffs in developing countries.
- Subjects
NAIROBI (Kenya); SANITATION; WATER utilities; HOUSEHOLDS -- Social aspects; SOCIAL status; DEVELOPING countries
- Publication
Water Resources Research, 2016, Vol 52, Issue 6, p4845
- ISSN
0043-1397
- Publication type
Article
- DOI
10.1002/2015WR018375