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Distribution, equity and domestic water charging regimes: the case of Scotland

McMaster, R., and Mackay, D. F. (1998) Distribution, equity and domestic water charging regimes: the case of Scotland. Annals of Public and Cooperative Economics, 69 (1). pp. 85-105. ISSN 1370-4788 (doi:10.1111/1467-8292.00074)

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Publisher's URL: http://dx.doi.org/10.1111/1467-8292.00074

Abstract

This paper argues that charging for a merit good, such as water, raises important distributional concerns. More direct charging is likely to demonstrate a pronounced impact on poorer sections of society. Arguably, this carries potentially adverse allocative efficiency effects. Following Hochman and Rodgers' (1969) thesis that wealthier individuals may benefit from the redistribution of income to the poor; the regressive pricing of merit goods will engender external costs. We argue that this is likely in the context of domestic water provision in Scotland. On this basis we evaluate the comparative regressiveness of five alternative charging arrangements. Somewhat counter-intuitively, our simulation results reveal that a flat rate licence fee may be marginally the least regressive of the five arrangements.

Item Type:Article
Status:Published
Refereed:Yes
Glasgow Author(s) Enlighten ID:McMaster, Professor Robert and Mackay, Dr Daniel
Authors: McMaster, R., and Mackay, D. F.
College/School:College of Medical Veterinary and Life Sciences > Institute of Health and Wellbeing > Public Health
College of Medical Veterinary and Life Sciences > School of Medicine > Centre for Population and Health Sciences
College of Social Sciences > Adam Smith Business School > Management
Journal Name:Annals of Public and Cooperative Economics
Publisher:Wiley
ISSN:1370-4788
ISSN (Online):1467-8292
Published Online:16 December 2002

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