Optimal Pricing of a New Utility Service: The Case of Piped Water in Vietnam

• 成果类型: Article
• 署名作者: Do, Quy-Toan; Jacoby, Hanan G.
• 署名单位: The World Bank
• 刊物名称: REVIEW OF ECONOMIC STUDIES
• ISSN/ISSBN: 0034-6527
• DOI: 10.1093/restud/rdae074
• 发表日期: 2025
• 页码: 1773-1800
• 关键词: electricity demand; Projection bias; habit formation; short-run; inference; adoption

摘要

As utility services expand throughout the developing world, providers must grapple with how to set prices to recover average costs. Data from a multiyear randomised pricing experiment among nearly 1,500 recently connected piped water customers in Vietnam reveal month-to-month demand persistence. Based on structural demand estimation, we document how endogenous preferences, if unaccounted for, can lead to low take-up and thereby threaten the financial viability of the new water utility. We also show that such demand persistence calls for pricing schemes that defer lump-sum payment, effectively allowing future consumers to subsidise their present selves.