Water Tariffs and Affordability in Urban Water Supply and Wastewater Systems

Urban water utilities attempt to achieve financial sustainability by increasing tariffs to cover the operational and maintenance costs and raise funds for infrastructural projects. Although the tariffs are relatively low compared to average household incomes in developed countries, concerns remain about the affordability in low-income groups. This study analyzes the urban water consumption and the effects of water tariffs on affordability in 266 upper-middle- and high-income cities from 44 countries for the period 2011–2021. The water consumption does not distinctively differentiate within the assessed period, and the water tariffs seem to have moderate effects on the consumption trends. The consumption is proportionally higher when fixed (flat) rates are applied and when the fixed rates are higher than the variable (usage) rates. There is high variation in the affordability rate in the sample cities; however, the cities of South Europe, Central and East Europe and South America seem to have the lowest affordability levels. The affordability appears to have improved for the majority of our sample cities from 2017 to 2021, while the higher water fees and increased consumption are associated with a decrease in affordability throughout the same period.