| Abstract: | ABSTRACT: It is contended that water conservation measures that reduce a water system's net revenues are unlikely to be adopted. Pricing policies that induce conservation can be designed to increase net revenues. Management practices that lead to conservation and pure conservation measures may reduce net revenues; consequently, they are unlikely to be adopted. Recent experience in five southwestern cities supports these contentions. It is argued that the managers of a municipal water enterprise are particularly sensitive to short term variation in revenues. Consequently, to increase the likelihood of the adoption of measures that reduce net revenues it is necessary to remove either the decision to adopt measures that reduce net revenue or the adverse revenue effect from the water enterprise. Finally, to make higher rates for conservation palatable, imaginative use for the funds generated must be developed. |
