Subsidies and affordability: a social approach to water supply tariffs

ABSTRACT This study provides evidence of targeting the performance of subsidies and affordability of water supply services (WSS) in a low-income society marked by disparate socioeconomic indicators. We used sample microdata from the local census regarding income, as well as information about price, tariff structure, water consumption, distribution of consumer units by billed volume ranges, and the average cost of WSS by the service areas (SA) in the Federal District, Brazil, in 2019 and 2020/2021, periods in which there was a transition from the tariff methodology. The results showed average water consumption of 108 L.inhabitant−1. day−1 and 399 L.inhabitant−1. day−1 in the lower and higher-income areas, respectively. Customers with a monthly consumption of less than 27 m3 were subsidized in both tariff cycles. The distribution of subsidies was regressive according to the connection and consumption index in the SA of lower income. Approximately a quarter of the families in the lowest income regions commit more than 3% of their income to consume water in the lifeline block of the WSS tariff structure. Findings also indicate that poorer households headed by women with children are more likely to have water poverty problems.