Theory of equity in pricing for resource conservation

This paper seeks to construct some theoretical tools that can be used to examine formally the equity issues raised in the use of pricing as a means to conserve scarce resources, in particular, the criteria that can be used to judge the equity of such a price change and the special problem raised by differences in elasticity of demand of different customer groups are considered. Toward this end the concept of a “superfair” distribution (a distribution under which each and every participant obtains a share of the total which is equal to or greater than that individuars pro-rata share, in his own estimation) is introduced and discussed.