TY  - GEN
AU  - Cunial, Santiago
AU  - Pérez Urdiales, María
TI  - Subsidy Targeting and Water Affordability: Insights from Colombia's Urban Centers
PY  - 2025
Y1  - 2025/07/31
DO  - 10.18235/0013631
AB  - Water affordability is a critical issue for achieving Sustainable Development Goals (SDGs), including access to clean water and sanitation for all. Countries in Latin American and the Caribbean are doing relatively well in terms of access to water. However, evidence on water affordability is rather scarce in the region. This paper draws on the literature on water economics on water affordability and subsidy targeting performance to evaluate the nexus between these two dimensions in the capitals of the 32 departments in Colombia. We show that a substantial portion of the population in the cities devote more than the international standard threshold for water affordability to pay for tap water. Yet, the specific structure of tariffs (in particular to what pertains to subsidies) exhibits an intimate relationship with affordability concerns. More progressive benefit incidence indices tend to reduce the share of income devoted to water expenses, while increases in the beneficiary incidence index reflecting the extent to which low-income households are left out of subsidy programs exacerbate affordability problems. Larger subsidies both in terms of their monetary value and the way they are distributed across household categories can unintentionally increase the financial burden on higher-income households, leading to greater affordability challenges. Moreover, our paper finds that households headed by women, ethnic minorities, singles, and the unemployed facing higher odds of water unaffordability. Our analysis underscores the necessity of taking into account subsidy targeting performance to design more effective interventions that ensure equitable access to affordable water for all households.
UR  - https://doi.org/10.18235/0013631
ER  -