Introducing a new measure of residential water rate progressivity

Abstract

Utility rate structures play a crucial role in water conservation. Rate structures send signals to consumers about the desired level of water consumption. Despite the importance of rates as a form of conservation policy, there is currently no broadly comparable measure of the conservation orientation of utility rate structures across rate structure types. Previous studies investigating the correlates of rate structures have made use of a dichotomous variable of whether a utility has adopted conservation‐oriented rates. I develop a slope‐based measure of rate progressivity to capture the variation of water rates. Using an original data set of utility rates data for 852 U.S. cities, I explore the distribution and variety of water rates across the United States and use a statistical analysis to explore the potential correlates of municipal rate progressivity, showing differences between the dichotomous and continuous measures.