Perceptions of Water Pricing during a Drought: A Case Study from South Australia

Abstract: This paper examines the perceptions of urban and regional water consumers in three areas of South Australia on the fairness of the water pricing system, the impact of increases in water pricing on households and pricing as a driver of water conservation. The study was conducted in 2009 during a time of severe drought and mandatory water restrictions. The results did not show a general aversion to all aspects of price increases but rather different sectors of the population were particularly resistant to different, specific aspects of water pricing. A state-wide water pricing policy in South Australia means that all consumers pay the same rate per volume of water consumed regardless of their location; yet in the regional study area, where it costs more for the service provider to supply the water, the respondents had stronger feelings that the price of water should be higher in places where it costs more to supply it. Generally, low income earners were less in favor of a block pricing system than higher income earners. The latter findings indicate a common lack of awareness around various aspects of water pricing. Some implications of the findings for water managers are outlined.