Skip to main content
Open Access Publications from the University of California

UC Riverside

UC Riverside Previously Published Works bannerUC Riverside

Have Chinese water pricing reforms reduced urban residential water demand?


China continues to deal with severe levels of water scarcity and water pollution. To help address this situation, the Chinese central government initiated urban water pricing reforms in 2002 that emphasized the adoption of increasing block rate (IBR) price structures in place of existing uniform rate structures. By combining urban water use records with microlevel data from the Chinese Urban Household Survey, this research investigates the effectiveness of this national policy reform. Specifically, we compare household water consumption in 28 cities that adopted IBR pricing structures during 2002–2009, with that of 110 cities that had not yet done so. Based on difference-in-differences models, our results show that the policy reform reduced annual residential water demand by 3–4% in the short run and 5% in the longer run. These relatively modest reductions are consistent with the generous nature of the IBR pricing structures that Chinese cities have typically chosen to implement. Our results imply that more efforts are needed to address China's persistent urban water scarcity challenges.

Many UC-authored scholarly publications are freely available on this site because of the UC's open access policies. Let us know how this access is important for you.

Main Content
For improved accessibility of PDF content, download the file to your device.
Current View