Analysis of a current water tariff and attitudes towards change: A representative study from a Palestinian city

The problem of an outdated tariff has become acute recently with increased water scarcity in Palestine. Therefore, the goals of the study were to analyse the factors that could affect the water consumption in Jericho governorate, Palestine; explore societal perceptions of alternative water sources; and to identify areas that need to be re‐examined for tariff revision or changes to water source and delivery. A total of 76% of the respondents know the water tariff price, and 61% of the sample considers the tariff as high. Future suggestions to raise the price of water will meet resistance. Interestingly, 66% of the respondents agree with the possible future use of treated wastewater, and 46% of the respondents emphasize that treated wastewater is the most favoured solution for water scarcity. Overall, the results indicate the public identifies water conservation as possible and that alternative actions can be applied in order to manage and conserve water resources.


| INTRODUCTION
The present paper provides an analysis of the water tariff in one district in Palestine with the intent to understand the current situation and consider changes in the future.Water resources in many countries are limited and becoming more tentative due to growing populations, economies and global climate change (Abdah et al., 2020;Anayah et al., 2021;Bigas, 2012;Daghara et al., 2019;Hejaz et al., 2020;Karimidastenaei et al., 2022;Kenney et al., 2008).Despite the availability of water in Palestine, the impediment to access it due to the Israeli occupation is one of the most pressing issues facing the Palestinians.Israel controls more than 80% of the ground water in the West Bank, and the Palestinians are denied the majority of fresh water in their land (WHO and PNIPH, 2015).
A water tariff is created as part of water resources management programmes to establish a suitable price that users are expected to pay (Babamiri et al., 2020;Crookes, 2018;Laredo, 1991).Tariffs are important for sustainable service supply and to reach the objectives of access to improved water supply and sanitation (Ahmadi & Zarghami, 2019).In developing countries, there is a need to frequently reform a tariff structure as there is little socioeconomic sustainability (Martins et al., 2013).Developed countries are usually more open to reforming water pricing policies (Ahmad & Prashar, 2010;Dinar & Subramanian, 1998;Momeni et al., 2019), but resistance still occurs especially for proposed larger magnitude rate increases.The process of reforming is challenging and can involve many stakeholders working in concert with a water agency or utility (Aggarwal et al., 2013;Boland & Wittington, 1997;Portoghese et al., 2021).It is also made more difficult by the need to set tariff structures at levels that satisfy the basic need for water services for all economic levels in the population served (PWA, 2020).An effective water tariff system should be affordable for all consumers, safe, acceptable to the population and administratively and institutionally feasible and capable of recovering costs (Banerjee et al., 2008;Neto & Camkin, 2020).
Utilities and governments have a range of factors to consider in setting a tariff amount including redistribution of income, water allocation improvement and water conservation (Díaz et al., 2016;Dinar & Subramanian, 1998;Hommes & Boelens, 2017).Water service costs include (1) fixed capital costs associated with initial infrastructure and connection construction costs and (2) variable operation, maintenance and rehabilitation costs (Banerjee et al., 2008;Hasan et al., 2021).Most utilities and governments aim to cover operating and maintenance costs with tariffs, and some have achieved this goal and thus are able to provide cost effective management of their water services (PWA, 2020).
There are two basic types of tariff structures: metered (measured) and unmetered (unmeasured) (Sohail, 2004).Metered (volumetric) tariffs are applied with the actual volume of usage being measured, and a tariff is applied to each unit of volume used (Barraqué, 2011;Cairns, 2018;Hilbig & Rudolph, 2019).The flat rate system is the simplest form of volumetric tariff where a single rate is charged per unit of usage (e.g., per cubic metre of water used) (Libey et al., 2020).
The Increasing Block Tariff (IBT) is applied by increasing tariffs per unit of water for higher levels of consumption (Hu et al., 2022).
IBT is the tariff system that has been used in many developing countries.This structure was first designed in developed countries to assist poor households through revenue cross subsidies and continues to be used in locations where water conservation is critical and high tariffs are needed for those that are using excessive amounts of water.IBT contains a set of procedural rules to determine the monthly bills for water users in different categories.The water use in a specific category is charged a unit price for the first unit consumed up to a certain amount (the first block).Then, the users have to pay a higher price above this amount for additional units until a second amount is reached (second block) and so on until the highest block in the structure is reached (Boland & Whittington, 2000;Zetland, 2021).The charge applied to the top block of consumption could reflect the marginal cost of water.The lower blocks provide subsidy and then protection for low income households.The difficulty encountered with this structure is determining the appropriate cut offs for the blocks (Donkor, 2010;Sohail, 2004).
There are several arguments to advocate for IBT structure.First, it is claimed that IBT encourage equity as high income households have to cross subsidize low income households as wealthy households have private and metered connection and usually use more water than low income households.Commercial and high income industrial firms also subsidize low income residential customers with revenues.
Second, IBT is desirable because the price associated with the highest block can discourage or stop wasteful water use.Third, IBT is needed to implement marginal cost pricing principals.The rationale here is that the most expensive block is set equal to marginal cost, and then, marginal cost pricing is accomplished.Finally, the issue of public health externalities is promoted by this structure.To learn more about the water tariff in the study area and the West Bank and compare it with neighbouring countries, the following research context section has been added.
The water tariff in the region is described.Tunisia, as an example, has a five block tariff system based on cubic metres consumed per quarter, with each block corresponding to a different tariff per cubic metre.Palestine, Cyprus, Morocco and Israel have similar structures with a fixed rental cost per month along with a variable cost based per cubic metre consumed (PWA, 2020).
The average tariffs for countries in the region are displayed in Table 1.In all countries listed, water use is metered and charged according to volume use.Currently, water prices for users vary widely across regions and sectors.Agriculture users pay lower prices than industrial users.Prices differ among regions in ways that are not always consistent with water transportation costs.And finally consumers face an increasing block rate pricing structure where higher prices are paid for higher levels of consumption (Tamimi et al., 2005).
Moving to the situation in Palestinian, tariff systems in the West Bank vary from flat rate pricing to the increasing block tariff (Rabi & Awartani, 2002).The price and tariff structure for Jericho City are shown in Table 2.
To create an effective reform process for the water tariff in Palestine, many inter-connected factors are required to be considered, including revenue sufficiency, economic efficiency, equity and poverty.Revenue sufficiency means recovering the cost to operate and maintain the water infrastructure system from the supplier point to the consumer end.Economic efficiency means prices should be set and clarified in order for the beneficiary to manage the price.Equity is an important factor that ensures the beneficiaries are charged fairly and receive equitable levels of service (Adeniran, 2014;Mylopoulos & Fafoutis, 2012).Finally, addressing poverty requires a tariff structure that provides an affordable cost for those impoverished, as well as potentially considering water as a basic human right.These factors are important to consider in setting the tariff rates and structure (Gunawansa & Hoque, 2011;Kampragou et al., 2011;Whittington, 2003).
The lifeline rate is known as the two tariff system where equity of water distribution is provided for low income families when water conservation becomes considerable (Gurung & Martínez-Espiñeira, 2019;Monteiro & Roseta-Palma, 2011;Olmstead & Stavins, 2009;Tamimim, 2008).This system is good as it takes into T A B L E 1 Average tariff in countries near to Palestine (Euro/m 3 ).consideration the basic needs of the poor and the increase in water prices above the lifeline quantity discourages high-income families from consuming more water (Kayaga et al., 2003;Tamimi et al., 2005).The main tool used in the data collection was a structured questionnaire specifically designed for this study.The questionnaire was developed after reviewing the international literature as well as based on the experience of researchers.Before starting data collection, the respondents are informed of the objectives of the study that it is for scientific research purposes only, and any information collected is collected in the analysis process as a way to ensure the privacy of individual data.The names of people do not appear in the study, and their verbal informed consent is taken to take the data.Three field researchers were hired and well trained on data collection as well as its ethics.The response rate of the study reached 93%.

| METHODS
The questionnaire covered the socio-economic characteristics of the respondent as well as variables related to the respondent's opinion regarding the current water tariff system in Palestine and the use of treated water for irrigation for the purpose of identifying similarities and differences for a system suited to the conditions of the location.The questionnaire included different independent variables: gender, age, educational attainment, monthly income, number of family members and household area.It also covered dependent variables such as average monthly water consumption, respondent knowledge about the current tariff system including, the price of water per cubic metre, attitudes towards price, opinion of the effect of water bill on standard of living and the acceptance to use treated wastewater in some aspects like agriculture.Jericho was chosen because the water price is the cheapest in the West Bank.This was particularly important for assessing attitudes towards willingness to accept use of treated water as an alternative source for some uses.The price of a cubic metre in Jericho City is € about 0.27 Euros for each cubic metre for the first 100 m 3 while it reaches 1.35 Euros in other areas in the West Bank.
According to Yates et al. (1999), the calculation for the sample size is considered based on the following equations: where z is the value (1.96 for 95% confidence level), m is the margin of error (±5%) and p is the estimated value for the proportion of a sample that will respond a given way to a survey question (85%).
The sample size equation solving for n 0 (new sample size) when taking the Finite Population Correction (FPC) Factor into account is where n is the sample size based on the calculations above and N is the population size (4451 households).
Based on the equations and the data for Jericho shown, the sample size of people needed for the survey was found to be 188, and 195 persons were surveyed.
The data were compiled and analysed using the Statistical Pack- Table 3 shows the overall citizens' behaviour information towards water tariff and its related variables.A high percentage (76%) of respondents is aware of the tariff price, and 61% of the sample considers the tariff as high.Two important results from the survey are the average water consumption, and per cent of income respondents would be willing to pay for water, which are 21-50 m 3 /month and 1-3% of income, respectively.
Another variable highlighted in these results is the use of recycled wastewater as an alternative for fresh water, with 66% of the respondents approving of using treated wastewater.

| Effect of household's average monthly income on water tariff
In order to see the effect of the average monthly income on the water tariff, ANOVA test was performed.As can be seen from Table 4, there is a statistically significant relationship ( p value < 0.05) between water tariff pricing knowledge with respect to the household's average monthly income.Of the respondents that know the tariff pricing, 27% of them are in the low income bracket, 66% of them are in the middle income bracket and 8% in the high income bracket.It may be that the lower income families have subsidized water, which could explain their lack of knowledge of current water tariff pricing in accordance with their priority of need, while the middle income families are interested in water prices because any increase will directly affect their living conditions and economic situation.Although high income families are anticipated to not pay much attention to increases in water rates because it has no noticeable impact on their ability to pay, 100% of those surveyed in the high income category new the water tariff.
In Table 5, the association between the average monthly income and the consideration of the appropriateness of the cost of water is not statistically significant ( p value > 0.05).There are confusing results as 69% of respondents with low income consider the cost of 1 m 3 of water high, while 75% of respondents with high income consider the cost of 1 m 3 of water as high.This suggests that respondents with high income want to pay less for the same amount, to a larger degree than those with lower income.This result is close to the results of Liu et al. (2003), where the lower income respondents agreed to pay more than the higher income individuals.
In their study about the household income under increasing block rates for water, Agthe and Billings (1987) found that higher income households not only use more water but have lower elasticities of demand.Thus, a uniform proportional rate increase will cause a larger percentage drop in water use among low income households than among high income households given the assumption of declining marginal utility of water use.
Confirming the previous observation, Table 6 shows 49% of the respondents with low income noted willingness to pay up to 3% of their income, 39% of the respondents with medium income noted willingness to pay up to 3% from their income and 100% of the respondents with high income noted willingness to pay only up to 1% from their income.

| Effect of educational attainment of respondents on water tariff
The educational attainment of respondents was compared to their opinion on the suitable percentage of their income to be paid for T A B L E 3 Respondents behaviour information.

Question Frequency and percentage Total
The extent of your knowledge of water pricing?water bill.A total of 46% of those with preparatory education reported that they would be willing to pay 1-3% of their income, 47% of those with secondary education reported willingness to pay 1% of their income and 48% of those with bachelor and higher studies reported willingness to pay 1-3% of their income (Table 7).
As a general trend, the willingness to pay more for water goes up with higher educational level.The agreement with willingness to pay 1-3% of income for water was positively associated with educational attainment with 41% of the respondents reporting agreement.The results of this study are in line with that of Kayaga et al. (2003), who found that more educated heads of households are expected to have a higher appreciation of the importance of maintaining sustainability of service delivery.This is probably because they have a higher opportunity cost for time spent collecting water from off-plot alternative sources and prefer engaging in other more productive tasks.
T A B L E 4 Water tariff pricing knowledge with respect to the household's average monthly income.

Average monthly income
The extent of your knowledge of water tariff?T A B L E 6 Average monthly income compared to percentage of your income willing to be paid for water bill (frequency and percentage).

Average monthly income
Suitable percentage of your income to be paid for water bill Note: Chi-square = 35.961,df = 8, P value = 0.000.

| Effect of the number of family members on water tariff
In Table 8, the relationship between the number of family members and the suitable percentage of respondents' income to be paid for water bills is statistically significant ( p value < 0.05).The highest percentage of the respondents (40%) regardless of their family size reported that they agree with the willingness to pay 1-3% of their income for water bill.This percentage decreases from 55% for families with four to five members to 33% for families with seven or more members.It is worth mentioning that the largest percentage (33%) of families that have the willingness to pay 3-5% of their income for water bill are those with seven or more members.Our results are in line with the results of Vasquez et al. (2009), who conducted a study about willingness to pay for safe drinking water in Parral, Mexico.
Their results indicate that households are willing to pay from 2% to 8% of reported household income above their current water bill for safe and reliable drinking water services.Almost similar results were found Kayaga et al. (2003).They found that as the larger the size of the household, the more favourable a household will be towards payment of water bills, as absence of water in a home would cause more inconvenience for a larger household.Besides, it would be easier for a smaller household to receive water from a neighbour at a smaller or zero cost than for a larger household.The results of this study are also in line with the study conducted by Casey et al. (2006) in which it was found that households in Manaus, the economic hub of the Amazon, are willing to pay considerably more for improved water service than they are paying for current service.On average, households in these six low-income and working class communities in Manaus are willing to pay more than US$5.61 per month.This amounts to more than US$72 per year per household, which is approximately 3% a household's annual income.The results of the current study are also consistent with previous work in urban India (Raje et al., 2002) and urban Nepal.
T A B L E 7 Educational attainment of respondents compared to their opinion on the suitable percentage of their income to be paid for water bill (frequency and percentage).

Educational attainment
Suitable percentage of your income to be paid for water bill (Chi-square = 51.563,df = 12, p-value = 0.000).

| Effect of the household area on the average monthly water consumption
In order to see the effect of the household area on the average monthly water consumption, a cross-tabulation was performed.This test revealed that there is a statistically significant relationship (i.e., p < 0.05) with the household area, as shown in Table 9.
The highest percentage of respondents (69%) in terms of household area was those who have a household with an area of 100-200 m 2 .As a general trend, it can be noticed that as the household area increases, the average monthly water consumption increases.For example, 64% of respondents who have a household of <100 m 2 consume 20 m 3 of water or less, while 71% of the households with an area of more than 500 m 2 consume 51-70 m 3 .Another example, 17 out 39 (44%) of those who have 200-500 m 2 household area consume an average of >70 m 3 monthly, while this percentage decreases for households with less area.This can be explained by the fact that as the household area increases, it is expected that the income will increase, and these households are more likely to respond faster to water bills than households with smaller areas.This is because households in the former category have a higher ability to pay for utility services than those in the latter category.Our results are in line with the results of Pal and De (2015), who found in their study that large household are expected to require more water.The supply of water on the other hand is not significantly affected by price and the extent of municipal supply and deficiency, though the coefficients are as expected.
From the survey results, it is found that the highest percentage of the sample (83%) consumes less than 70 m 3 of water per month and as we know that the price of cubic metre in Jericho is 0.27 Euros/m 3 from the first 100 m 3 , this means that the numbers and percentages go along with the price for cubic metre between the current rate and a rate set according to the willingness to pay question on the survey.
Although there have been insufficient valuation studies to compare the willingness to pay for improvements in quantity and quality of drinking water for improvements in other public services, one can make a convincing case that the municipal government of Jericho City should undertake an upgrade of water services, even if it means raising costs to consumers (Casey et al., 2006).It is worth mentioning that the average monthly consumption of 78% of customers in Jericho City was within the category of 1-100 m 3 in 2014 as shown in Table 10.
One final and important observation from the survey was the majority of the respondents (66%) agreed to the possible use of treated wastewater as a substitute for using potable water in toilets and in agriculture.This does assume the cost of the treated wastewater is lower than the cost of using drinking water in spite the fact that the price of cubic metre of water is the lowest in Jericho compared to other cities in the West Bank.This percentage is reflected by the result that 61% of the respondents consider the price of 1 m 3 of water as high and goes along with the result of the reasons for using treated wastewater (64%) to save money, conserve drinking water availability and to protect water resources.

| Suitability of water tariff
In in order to have sustainable tariffs for water, the current situation should be changed, and sustainable tariffs should be introduced that provide affordable water for essential use but penalize excessive and wasteful use.Such tariffs should take the form of IBT that provides a certain quantity of water for the basic needs at a low price, with prices then increasing at higher levels of use.This requires a clear guidance from the Palestinian Water Authority that sustainable pricing structures should be introduced.This suggests the need for public intervention to promote the sustainability of water resources.Water prices can contribute to sustainability and encourage a more efficient use of water resources and a more equal distribution of water access costs.Water pricing policies are mainly applied in urban settings, in the supply of water to households and firms.Therefore, a policy of providing comparative information selectively aimed at households with high consumption levels could contribute to sustainability.
T A B L E 9 Variation of the household area compared to the average monthly water consumption in m 3 (frequency and percentage).

Household area
Average monthly water consumption (m 3 ) Additionally, tariff structures can incorporate some form of seasonal pricing or overconsumption penalty to promote environmental sustainability and the principles of a circular economy.
It is the opinion of the authors that the IBT system is one that may be acceptable in the West Bank.This system promotes equity through cross subsidy from high income to low income and promotes water conservation.The disadvantage of this structure is that it is not associated with socioeconomic conditions and not appropriate to deal with uncertainties (Tamimim, 2008).However, this system is suitable in the West Bank if it is properly designed.It may still be applied differently across West Bank districts with available data and reasonable logic and assumptions in deciding on number, size and price for each block.The covering of costs is achieved by including a minimum payment in the first block instead of achieving cross subsides from high income to low income (Tamimi et al., 2005).The potential problem in Palestinian municipalities and water utilities, as is the case in other locations, is a decrease of income from water fees despite the increase of water prices.This may happen if there is a decrease in the number of customers who are not able to pay their bills and in general a decrease in water use because of the desire to reduce costs or conserve water.For example, in Hebron district, which is the largest governorate in Palestine, 75% of the consumers did not pay their bills during the period of 2003-2007(PWA, 2007)).Further complicating the setting of an IBT may be the lack of a unified tariff system at the national level in Palestine, as each governorate follows its own system set by municipalities or water utilities (PWA, 2007).
IBT can only work if each household has a private metered connection (Whittington, 1992).In addition to that, large families are usually under served by this system as a volume of 4-6 m 3 per month does not meet the essential needs of a household with 10 members (PWA, 2020).Considering these challenges, there is a need for a modified form of the IBT system that meets the socioeconomic and uncertain political conditions in the West Bank.

| CONCLUSIONS AND RECOMMENDATIONS
This paper responds to the goal of creating a water tariff system for Palestine by analysing through a structured questionnaire survey, the factors that could affect the water consumption.Analysing these factors, such as socio-economic characteristics, factors related to the perception of users regarding water pricing scheme, and so forth, are relevant, as a previous step, to guide the policy makers for designing an effective water tariff.
The results indicated the majority of respondents (76%) know about the water tariff price and a smaller majority (61%) considers it a high price.Given the fact that 78% of people in Jericho, according to the municipality, are from the first category that ranges between 1 to 100 m 3 with price of 0.27-27 €, with average of 0.27 €/m 3 .This means that there will be difficulties to adjust the rate structure, unless the message is clear and convincing.Meanwhile, the limited increase of price for 1 m 3 will overall lead to reducing the consumption amounts in different categories, but it can be the largest in the first category that comprises 78% of the people.Based on willingness to pay, we can consider up to 3% of the income as the suitable percentage for the population.
The research findings of this study may have certain consequences for improving the water tariff system, mainly cost recovery in water utilities in developing countries.It is expected that media messages targeted at the heads of the households will yield more positive payment behaviour for water bills.Water utility managers could also take advantage of the better-educated people to act as utility promotion agents, as the willingness to pay more for water rises with educational level and it is expected that the well-educated have considerable influence in their areas of residence.
There is another important result from the survey, which is the general acceptance to use treated wastewater instead of potable water in toilets and in agriculture, which gives an opportunity for the municipality to think seriously on this point.A total of66% of the respondents agreed that in case the price of the cubic metre of treated wastewater is less than drinking water the use of treated wastewater is acceptable, while 61% agreed that in case the price of treated cubic metre is the same as drinking water price.
The effectiveness of water prices as an instrument for managing water demand depends on how much the consumers are actually aware of them.Therefore, an information policy appropriately directed at users would be expected to make prices more effective, leading to an increase in the price elasticity of demand for water, which is especially desirable in the current context of water scarcity.
IBTs can also be used to promote environmental sustainability by influencing water consumption, yet similarly, there is limited empirical evidence to support their effectiveness in this capacity.Conceivably, greater efficiency could be achieved through a two-part tariff that  Based on the study presented in this paper, the following recommendations are given: 1. Considerations to accompany the water tariff re-examination need to include enhancing the capacity building of the staff working on these systems to increase collection of performance information and improve efficiency.
2. Changes to the existing water tariff system need to be acceptable for all consumers at different income levels.
3. Protocols must be established to ensure regular monitoring, reviewing, and updating of the tariff system.
4. A concerted effort is needed to increase public awareness and comprehension of the water tariff and consumption patterns and rates, engage them in cooperation towards conserving resources and gain acceptance of using treated wastewater in different sectors like agriculture.
5. The tariff price in Jericho and other cities should be reconsidered to cover at least the operation and maintenance costs, as the majority of people indicate they would be willing to pay a slightly higher rate.
6.A new tariff system should be considered based on the need for an equitable distribution system that accounts for low-income residents (a third of the respondents).
7. Since the majority (83%) of families in Jericho City consume up to 70 m 3 /month and pay up to 19 € per month, the lowest block could be changed to 0-70 m 3 instead of 0-100 m 3 since most people would be unaffected and satisfied, but the city would still benefit.
8. It is worthwhile for utilities in developing countries to offer more resources to promotional campaigns informing all customers, and especially educated ones, about the services being provided and the financial obligations of sustaining reliable services.9. Consider the acceptance of using treated wastewater end uses to achieve future sustainable water management to meet water demand and reduce sewage discharges to water bodies.
This study was carried out in the city of Jericho located in the West Bank-Palestine during the period of March to May 2021.The population of Jericho City is projected at 22 699 persons (4451 households) in 2022 (Palestinian Central Bureau of Statistics, PCBS, 2021).The study population consisted of people residing in the city.The target group included all adult residents and was selected randomly.The sample was selected from a wide spectrum of economic levels and social statuses.

|
Figure1presents the summary of the 195 respondents' background information to the questionnaire.Nearly all of the respondents are male, as the questionnaire was given to the household and the head of household completed it, as the head of the household has most of responsibilities for the finances of the family.These majority characteristics of the sample population will be considered later in the analysis and discussion.Based on the above results, educational level, which is measured by number of years spent on formal education, is an important factor.A total of 46% of the population has a Bachelor contains a fixed charge and a volumetric component.The fixed charge could be adjusted to assure (full or partial) economic cost recovery, while the volumetric rate could be used to send a signal about the scarcity value of water and the marginal cost of the service.
Note: Chi-square = 32.106,df = 12, p value = 0.001.Number of family members compared to percentage of your income willing to be paid for water bill (frequency and percentage).