Information and Modeling Issues in Designing Water and Sanitation Subsidy Schemes
In designing a rational scheme for subsidizing water services, it is important to support the choice of design parameters with empirical analysis that stimulates the impact of subsidy options on the target population. Otherwise, there is little gua...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2000/05/437410/information-modeling-issues-designing-water-sanitation-subsidy-schemes http://hdl.handle.net/10986/18848 |
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okr-10986-188482021-04-23T14:03:46Z Information and Modeling Issues in Designing Water and Sanitation Subsidy Schemes Gomez-Lobo, Andres Foster, Vivien Halpern, Jonathan ADMINISTRATIVE PROCEDURES BENCHMARK BENCHMARKS CONSUMERS CONSUMPTION LEVELS CONSUMPTION PATTERNS CONTINGENT VALUATION CROSS-SUBSIDIES DEMAND CURVE DURABLE GOODS ECONOMIC FACTORS ECONOMIC INFORMATION ECONOMIC RESEARCH ECONOMIC SURVEYS ECONOMIC THEORY ECONOMICS LITERATURE ECONOMIES OF SCALE EFFICIENT BILLING EMPIRICAL ANALYSIS EMPIRICAL STUDIES ENVIRONMENTAL ECONOMICS EXCESSIVE CONSUMPTION FUNCTIONAL FORMS HOUSEHOLDS INCOME LIQUIDITY LIVING STANDARDS In designing a rational scheme for subsidizing water services, it is important to support the choice of design parameters with empirical analysis that stimulates the impact of subsidy options on the target population. Otherwise, there is little guarantee that the subsidy program will meet its objectives. But such analysis is informationally demanding. Ideally, researchers should have access to a single, consistent data set containing household-level information on consumption, willingness to pay, and a range of socioeconomic characteristics. Such a comprehensive data set will rarely exist. The authors suggest overcoming this data deficiency by collating, and imaginatevily manipulating different sources of data to generate estimates of the missing variables. The most valuable sources of information, they explain, are likely to be the following: 1) Customer databases of the water company, which provide robust information on the measured consumption of formal customers, but little information on unmeasured consumption, informal customers, willingness to pay, or socioeconomic variables. 2) General socioeconomic household surveys, which are an excellent source of socioeconomic information, but tend to record water expenditure rather than physical consumption. 3) Willingness-to-pay surveys, which are generally tailored to a specific project, are very flexible, and may be the only source of willingness-to-pay data. However, they are expensive to undertake, and the information collected is based on hypothetical rather than real behavior. Where such surveys are unavailable, international benchmark values on willingness to pay may be used. Combining data sets requires some effort and creativity, and creates difficulties of its own. But once a suitable data set has been constructed, a simulation model can be created using simple spreadsheet software. The model used to design Panama's water subsidy proposal addressed these questions: a) What are the targeting properties of different eligibility criteria for the subsidy? b) How large should the subsidy be? c) How much will the subsidy scheme cost, including administrative costs? Armed with the above information, policymakers should be in a position to design a subsidy program that reaches the intended beneficiaries, provides them with the level of financial support that is strictly necessary, meets the overall budget restrictions, and does not waste an excessive amount of funding on administrative costs. 2014-06-30T19:05:07Z 2014-06-30T19:05:07Z 2000-05 http://documents.worldbank.org/curated/en/2000/05/437410/information-modeling-issues-designing-water-sanitation-subsidy-schemes http://hdl.handle.net/10986/18848 English en_US Policy Research Working Paper;No. 2345 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research Panama |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
ADMINISTRATIVE PROCEDURES BENCHMARK BENCHMARKS CONSUMERS CONSUMPTION LEVELS CONSUMPTION PATTERNS CONTINGENT VALUATION CROSS-SUBSIDIES DEMAND CURVE DURABLE GOODS ECONOMIC FACTORS ECONOMIC INFORMATION ECONOMIC RESEARCH ECONOMIC SURVEYS ECONOMIC THEORY ECONOMICS LITERATURE ECONOMIES OF SCALE EFFICIENT BILLING EMPIRICAL ANALYSIS EMPIRICAL STUDIES ENVIRONMENTAL ECONOMICS EXCESSIVE CONSUMPTION FUNCTIONAL FORMS HOUSEHOLDS INCOME LIQUIDITY LIVING STANDARDS |
| spellingShingle |
ADMINISTRATIVE PROCEDURES BENCHMARK BENCHMARKS CONSUMERS CONSUMPTION LEVELS CONSUMPTION PATTERNS CONTINGENT VALUATION CROSS-SUBSIDIES DEMAND CURVE DURABLE GOODS ECONOMIC FACTORS ECONOMIC INFORMATION ECONOMIC RESEARCH ECONOMIC SURVEYS ECONOMIC THEORY ECONOMICS LITERATURE ECONOMIES OF SCALE EFFICIENT BILLING EMPIRICAL ANALYSIS EMPIRICAL STUDIES ENVIRONMENTAL ECONOMICS EXCESSIVE CONSUMPTION FUNCTIONAL FORMS HOUSEHOLDS INCOME LIQUIDITY LIVING STANDARDS Gomez-Lobo, Andres Foster, Vivien Halpern, Jonathan Information and Modeling Issues in Designing Water and Sanitation Subsidy Schemes |
| geographic_facet |
Panama |
| relation |
Policy Research Working Paper;No. 2345 |
| description |
In designing a rational scheme for
subsidizing water services, it is important to support the
choice of design parameters with empirical analysis that
stimulates the impact of subsidy options on the target
population. Otherwise, there is little guarantee that the
subsidy program will meet its objectives. But such analysis
is informationally demanding. Ideally, researchers should
have access to a single, consistent data set containing
household-level information on consumption, willingness to
pay, and a range of socioeconomic characteristics. Such a
comprehensive data set will rarely exist. The authors
suggest overcoming this data deficiency by collating, and
imaginatevily manipulating different sources of data to
generate estimates of the missing variables. The most
valuable sources of information, they explain, are likely to
be the following: 1) Customer databases of the water
company, which provide robust information on the measured
consumption of formal customers, but little information on
unmeasured consumption, informal customers, willingness to
pay, or socioeconomic variables. 2) General socioeconomic
household surveys, which are an excellent source of
socioeconomic information, but tend to record water
expenditure rather than physical consumption. 3)
Willingness-to-pay surveys, which are generally tailored to
a specific project, are very flexible, and may be the only
source of willingness-to-pay data. However, they are
expensive to undertake, and the information collected is
based on hypothetical rather than real behavior. Where such
surveys are unavailable, international benchmark values on
willingness to pay may be used. Combining data sets requires
some effort and creativity, and creates difficulties of its
own. But once a suitable data set has been constructed, a
simulation model can be created using simple spreadsheet
software. The model used to design Panama's water
subsidy proposal addressed these questions: a) What are the
targeting properties of different eligibility criteria for
the subsidy? b) How large should the subsidy be? c) How much
will the subsidy scheme cost, including administrative
costs? Armed with the above information, policymakers should
be in a position to design a subsidy program that reaches
the intended beneficiaries, provides them with the level of
financial support that is strictly necessary, meets the
overall budget restrictions, and does not waste an excessive
amount of funding on administrative costs. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Gomez-Lobo, Andres Foster, Vivien Halpern, Jonathan |
| author_facet |
Gomez-Lobo, Andres Foster, Vivien Halpern, Jonathan |
| author_sort |
Gomez-Lobo, Andres |
| title |
Information and Modeling Issues in Designing Water and Sanitation Subsidy Schemes |
| title_short |
Information and Modeling Issues in Designing Water and Sanitation Subsidy Schemes |
| title_full |
Information and Modeling Issues in Designing Water and Sanitation Subsidy Schemes |
| title_fullStr |
Information and Modeling Issues in Designing Water and Sanitation Subsidy Schemes |
| title_full_unstemmed |
Information and Modeling Issues in Designing Water and Sanitation Subsidy Schemes |
| title_sort |
information and modeling issues in designing water and sanitation subsidy schemes |
| publisher |
World Bank, Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2000/05/437410/information-modeling-issues-designing-water-sanitation-subsidy-schemes http://hdl.handle.net/10986/18848 |
| _version_ |
1764441619129434112 |