Inequality in Access to Drinking Water and Subsidies between Low and High Income Households in Mexico City

Abstract

Economic and population growth in Mexico City (CDMX) is the main cause of an increase in water demand against a naturally limited endowment, which increases the gap between water demand and supply. In a water scarcity environment, households are facing pressure to maintain their involvement in the city’s only operating body, the Water System of Mexico City (SACMEX) total supply. The objective of this work is to measure the inequality in the distribution of drinking water and water subsidies between households connected to the public network of CDMX in order to generate objective indicators of the phenomenon. Having such information provides a baseline scenario of the problem and allows for the delineation of a policy covering the minimum levels of well-being in the supply of drinking water that is appropriate for the most important city in the country. The method consists of measuring inequality through continuous variables estimating the Lorenz curve, the Gini coefficient, the targeting coefficient and elasticity in water consumption and in water subsidies among households in CDMX. Data comes from a household survey carried out in 2011, Consumption Habits, Service and Quality of Water by Household in Mexico City (EHCSCA). Results show that drinking water and subsidies present a regressive distribution, benefit high-income households and, to a lesser degree, the poorest households in the city and highlight the urgency and importance for SACMEX to redefine its policy on water distribution, fees and subsidies. The present study’s scope can contribute to the monitoring of the distribution of drinking water and of subsidies among household groups. The study justifies that the indicators employed in this work can be used and are recommended as a valuable tool in water management, especially in a dynamic environment.