Water resource pricing: Policy options

This paper critically examines pricing policy options for water resources and attempts to derive an operationally feasible and socially desirable pricing structure for this important resource. Marginal cost pricing options are studied under different economic and resource conditions, such as inflation, constrained water resources and price distortions in an economy. Options such as pricing of water at its ‘real’ resource value, ‘social’ pricing, and pricing to reflect intangible benefits are also examined.