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Proportion of households above affordability threshold for water and sewer expenditure as a share of income, based on varying levels of daily per capita consumption (in gallons per capita‐day).
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In the US, the cost of water and wastewater services is rising three‐times faster than inflation. Over the next 20–25 years, required investments in water infrastructure are estimated to exceed $1 trillion, further increasing service costs. Combined with stagnating income levels, especially for poor households, increased costs will likely aggravate...
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Citations
... Most studies of water affordability consider simply water bills as the numerator of the affordability index, the most apparent financial recurrent expenditure associated with water consumption, whether basic (García-Valiñas et al., 2010a;Sebri, 2015), actual (Mack and Wrase, 2017), or hypothetical (Beard and Mitlin, 2021;Cardoso and Wichman, 2022). The bill includes the amount directly associated with the water service, but it can also consider other costs, such as those related to sewage collection, wastewater treatment, infrastructure fees, subsidies, and lifelines (Goddard et al., 2022). ...
... With this in mind, this ratio avoids the measurement error introduced by any over-consumption or under-consumption embedded in reported expenditure amounts (Goddard et al., 2022). The level of water needed is defined in different ways, such as following predefined standards (Cardoso and Wichman, 2022) or computing it based on the estimation of a Stone-Geary demand function (García-Valiñas et al., 2010b;Sebri, 2015), and has been referred to as a "basic water services" (Patterson and Doyle, 2021), an "essential minimum quantity" (Martins et al., 2019), or a "lifeline level" (García-Valiñas et al., 2010b). ...
... Macro level analyses focus on aggregated data, such as mean household income, while micro-level analyses examine specific income groups, family sizes, and other factors (OECD 2020). However, relying on average income figures can mask significant affordability, even in high-income countries (Martins et al. 2016;Raucher et al. 2019;OECD 2020;Cardoso and Wichman 2022). Determining what constitutes affordability is inherently subjective, especially when expressed as a percentage of household income (OECD 2020). ...
Water and sanitation affordability has emerged as a significant concern in recent years due to economic crises and the increasing reliance on tariffs to finance public services. Governments have often depended on inadequate affordability analyses, if any, to identify constraints faced by vulnerable families in accessing water supply and sanitation services. This paper proposes a comprehensive affordability analysis framework, considering six key dimensions: coverage rates, conventional affordability ratio, community poverty conditions, affordability ratio for poorer households, access to water social programs, and the burden of connection fees. The framework was applied to Brazil, focusing on its state-owned providers, which serve more than 70% of the population. The results demonstrate that the proposed framework offers a simple yet robust tool for decision-makers globally, with the flexibility to adapt to various contexts. The case study revealed that the Brazil’s conventional affordability ratio masks affordability issues faced by poorer families, along with low access to social tariffs, high incidence of poverty, and low coverage in several areas. These findings provide critical insights for stakeholders, enabling the development of targeted public policies and the design of appropriate subsidy mechanisms.
... Particularly, the residual income after making an expense for an essential service is relevant. Consequently, affordability is typically assessed for different income levels-particularly the lowest two income deciles-and for different locations (e.g., Cardoso & Wichman, 2022). The discussion of affordability in the 2024 Section 706 Report focuses on the price of broadband and the share of income that is needed by different income groups to purchase broadband. ...
The U.S. Federal Communications Commission regulates the telecommunications and electronic media sectors, which involves Commission economists in a broad range of issues. We first review how economists helped develop, implement, and improve spectrum auction designs that resulted in three decades of sustained innovation in radio frequency management. Next, we discuss the role of economic research in the open Internet proceeding. Economists also developed tools and analyses related to the state of universal broadband access. Finally, we consider how economists contributed to the establishment of the 5G Fund, which is intended to improve advanced wireless connectivity in rural America.
... In the context of the COVID-19 pandemic, food system inequities reinforced health inequities: Black and Indigenous communities and people of color in the US disproportionately experienced both increased food insecurity and hospitalization (Klassen and Murphy, 2020). Several studies assessing affordability highlight the importance of a nuanced relationship between economic, social, and demographic factors that can increase food, energy, and water resource vulnerability (Cardoso and Wichman, 2022;Doremus et al., 2022;Horst et al., 2016). ...
Barriers to affordable, accessible, high-quality food, energy, and water systems (FEWS) harm social equity. Connections within and across FEWS suggest that co-occurring barriers to equity can compound vulnerability. We hypothesized that barriers to FEW resources are strongly associated with geographic location, both within and across FEWS, as they rely heavily on localized sociopolitical and natural environments. This study explored the geographic relationships between FEWS barriers and social equity through a spatial analysis of census tracts within the United States. Cluster analyses showed that all FEWS barriers had a positive spatial autocorrelation (Moran's I = 0.12-0.94), with energy barriers being the most spatially clustered and affordability barriers being the least spatially clustered. In 54 % of census tracts, we observed the co-occurrence of low barriers to water quality and access. Barriers to FEWS affordability almost always co-occurred in parallel (e.g., high barriers to affordability in one system co-occurred with high barriers to affordability in another system). Finally, we developed a spatial index of the barriers to FEWS equity to determine vulnerability at the census tract scale, which had a positive spatial autocorrelation (Moran's I = 0.41). Clusters and intersections of FEWS equity barriers suggest that resources are interconnected, resulting in additional challenges for people living in these areas. The maps of barriers to equity in FEWS are useful tools that could help stakeholders (e.g., federal agencies, city planners, utilities) distribute FEWS resources fairly and begin engagement with communities about FEWS barriers in their local context.
... In the United States, the Environmental Protection Agency (EPA) issued guidelines for water affordability based on median household income as a reaction to concerns over the impact mandatory investments to meet the Clean Water Act requirements would have on water tariffs in the United States (EPA, 1997). These guidelines have been criticized for inadequately protecting lowincome households from overburdening water bills (Cardoso and Wichman, 2022;Jones and Moulton, 2016). They are now being revised to address the regressive nature of water bills better (EPA, 2022;Zhang et al., 2022). ...
Adapting urban sanitation systems to changing climate conditions will require substantial investments. However, there is a gap in understanding the funding strategies for such adaptation measures, especially amid concerns that resilience measures might reinforce existing urban sanitation inequalities. Through cross-case document analysis and complementary key informant interviews, we examined the sanitation adaptation investments in eight cities, focusing on their funding arrangements and social and intergenerational equity implications. Debt financing of sanitation adaptation often relies on repayment through customer bills with only opaque considerations of the affordability for different socio-economic customer groups. The lack of appropriate accounting for the lifecycle costs of resilient infrastructure threatens to mortgage future generations. There is no convincing evidence that ‘greening’ of adaptation financing either shifts or redistributes the financial risk more equitably nor does it make the repayment of the investments substantially cheaper for customers. We conclude that a public sector funding approach is most appropriate to ensure social and intergenerational equity within climate-resilient sanitation systems.
... It can be seen that for housing affordability metrics, the threshold was generally well established at 30 % while for energy it was 6-10 % depending on the context, where the lowest 6 % value was found in the US (Scheier and Kittner, 2022), while 8-10 % were used in European contexts. There were significantly fewer papers which addressed water services affordability, but for those that could be found, we found values of 4.5-4.6 % (Cardoso and Wichman, 2022;Patterson et al. 2023). Across these services, as a bundle of essential goods, housing is clearly such an important basis for well-being, that it can be reasonably expected to spend 40.5-44.6 % of income on these services. ...
... This is evidenced by directives in the Infrastructure Investment and Jobs Act [25], which includes a mandate for the U.S. Environmental Protection Agency (EPA) to conduct a water affordability needs assessment report to congress, currently in preparation. Water affordability-the percentage of household income allocated to water services [26][27][28][29][30]-issues disproportionately impact households with limited financial resources and heightened socio-economic risks [31][32][33][34]. The EPA's guidance and funding aim to ensure affordable utility rates and improve infrastructure, particularly in disadvantaged communities. ...
Urban water management is increasingly challenged by the need to balance cost-effectiveness with equity considerations. This study presents a multi-objective approach to water conservation within the Las Vegas valley water district, analyzing a comprehensive dataset of water consumption and socioeconomic indicators across all single-family residences. We assess policy scenarios under two primary objectives: maximizing water savings to enhance economic efficiency and improving water affordability to promote equity. Our analysis reveals that while strategies focused on water savings reduce water use more efficiently, they tend to favor higher-income, predominantly white neighborhoods whereas prioritizing water affordability shifts resources towards lower-income, communities of color. The analysis of intermediate policy scenarios reveals the trade-offs and potential synergies between water savings and affordability. Our findings suggest that local water sustainability can be achieved by allocating resources to both high-demand and socioeconomically disadvantaged households. Highlighting the importance of integrating equity considerations into water management policies, this study provides insights for policymakers in crafting more inclusive and sustainable urban water management practices.
... We define water affordability as a household's capacity to cover water costs for essential uses such as drinking, cooking, and sanitation without neglecting other essential expenditures [2,14]. The volume of water required to meet these needs varies across households due to differences in household occupancy and plumbing efficiency [15,16]. A household's ability to pay for basic water services is affected by income, wealth, and other dimensions of financial burden such as debt or family support obligations [10,17]. ...
Rising water prices threaten affordable access to basic water service in the U.S., especially in low-income communities. Faced with unaffordable water bills, households may use less water than is healthy, forgo other essential services, or fall behind on water bill payments, risking water shutoffs. Affordability ratios (ARs), which express water bills as a fraction of income, are the most common measure of water affordability. However, ARs can underestimate unaffordability due to both spatial aggregation bias and their reliance on indirect proxies for ability to pay. New metrics are needed to identify households at risk of water insecurity due to affordability challenges. Here we investigate alternative water affordability metrics that use water bill late payments and debt to track actual payment behavior at the household level. We define metrics that capture the frequency, duration, and severity of water bill delinquency. We apply these metrics to a case study in Santa Cruz, California, using monthly billing data for approximately 40 000 households from 2009 through 2021. We find large variation in delinquency across households and over time, with higher delinquency linked to proxies for low wealth such as lower assessed home value. Census blocks with similar ARs often have distinct patterns of delinquency behavior, suggesting that block-level median affordability estimates may be masking sub-populations facing affordability challenges. These results highlight the benefits of using multiple, household-level metrics to capture the role affordability plays in household water security.
... [1][2][3] While the impact of AI is still unknown, an increase in unemployment would affect water security. Already, over 10% of American households struggle to pay their water bills, 4 and rising operating costs are expected to increase the number of households with unaffordable bills to 35%. 5 AI has brought attention to Universal Basic Income (UBI), 6,7 a recurring payment to an entire population with no spending restrictions. 8 UBIs could improve access to water services since affordability is a function of both price and household disposable income. ...
Alaska has the lowest rate of access to in-home water services in the United States. At the same time, the state also has the world's oldest Universal Basic Income (UBI) program, and every Alaska resident receives an annual payment through the Alaska Permanent Fund Dividend (PFD) program. In this study, we use a panel dataset of rural Alaska water and sewer utilities in 18 Alaska villages from 2012 to 2016 to explore the impact of the PFD on residential payments. We estimate fixed effects for eight models. Models are developed by grouping villages by low and high variability in payments, enrollment in Alaska Native Claims Settlement Act (ANCSA) regional corporations and Community Development Quota (CDQ) organizations. We find that on average, each utility is missing 3671 to 734 200 to $2 011 600 in additional payments for water utilities. These findings suggest that the PFD and other unrestricted cash transfers can play an important role in increasing household water security in rural Alaska and other places with similar problems.
... where Y C is the household income of income class c, Y MHI is the median household income in Santa Cruz, and the income elasticity parameter ϵ Y is assumed to be 0.15 in our base case [32]. We use 16 income classes, ranging from $10 000 to over $250 000 annually from the standard census income distribution [32,33]. I A adjusts demand for each base rate structure A as: ...
Unaffordable water threatens water access in the United States, particularly for low-income households. In water-scarce cities, water shortages during drought necessitate either expensive infrastructure development or costly emergency measures to meet demand, which can in turn increase water rates. Rate design plays a key role in determining whether these costs threaten water affordability for low-income households, but water utilities are often constrained by local and state policy in their ability to set progressive rates. Therefore, new approaches to assess the impact of rates on water affordability within the local legal and hydrological context are needed in drought-prone regions. To address this gap, we design a socio-hydrological modeling framework that fuses legal analysis, behavioral economics, and water resource systems modeling to assess the impacts of rate design on household water affordability. We demonstrate this framework in an illustrative application in Santa Cruz, California, where droughts threaten water supplies and California Proposition 218 deters public water utilities in setting progressive rate design. Our results demonstrate that legal constraints reduce affordability during droughts by limiting drought surcharge rate structures. This framework can help utilities design rates to improve water affordability in their socio-hydrological context and illuminate the impacts of state policy on affordability outcomes.