Re‐examining the water affordability: A comparison of alternative measures

Abstract

AbstractWater affordability is determined by the percentage of income households that must allocate to municipal water services, while factoring in essential or basic needs water use. With the rise in water prices reported in most areas of the country along with somewhat stagnant income growth—a combination that suggests ceteris paribus—more of a household's disposable income is being spent on water services. This paper adds to the discussion in three ways. First, given the lack of a consistent definition for “affordability” and the subjective connotation associated with such a term, we develop and compare five different water expenditure ratios, including two different measures of water for essential needs, as well as measures for indoor, efficient, and actual water use. Second, because of the granularity of our data, we illustrate how such “affordability” measures can vary significantly within a water district and thus highlight how using district‐ or county‐level income measures can mask the degree to which affordability is an issue for households living in low‐income block groups. Our results indicate that the choice of income measure and type of water service use can influence affordability measures substantially.