U.S. water affordability measurement and impact on low-income households

The purpose of this graduate study is to examine the issues associated with the existing formula utilized to measure water affordability. Due to the imminent need to replace water treatment and distribution infrastructure across America, there has been a continuous increase in water rates. It is imperative that there is an accurate assessment of water affordability so that adequate policies can be developed, and resources can be equitably allocated to low-income customers and under-resourced communities as they are most vulnerable to the increasing cost of water services. However, the traditional method used to measure water affordability is inaccurate, misleading, and does not depict reality; it focuses on median household water demands as opposed to low-income households who primarily use water for non-discretionary purposes such as drinking, cleaning, and bathing. Moreover, the traditional water affordability measurement method is insensitive to the cost of other essential items such as food, healthcare, housing, and energy. This graduate study examines a revised method of calculating water affordability that is sensitive to the needs of low-income customers. Subsequently, the new approach is used to measure water affordability across four major metropolitan cities to demonstrate the difference that exists when low-income households are used as a basis to measure water affordability. Using public data such as costs for water services collected from the most recent water rates for the pertinent water service providers, and income information received from Statistical Atlas (2020), water affordability was measured using both the traditional and revised method. It was found that the revised method in some instances conflicted with the traditional method with regards to water service costs being deemed as affordable or unaffordable. Conclusively, this study will discuss the strengths, limitations, and applicability of the new method. Refinement of the water affordability measurement formula to more accurately depict reality can assist local, regional and federal leaders in the water sector develop more efficient and equitable financial policies to assist those who really need it most.

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