Affordability of Water Services in Portuguese Municipalities

Abstract

Charges for domestic water supply and wastewater disposal services have been raising affordability concerns. This paper empirically analyses the relevance of this problem in Portugal, considering the representative household for each Portuguese municipality as the observation unit. Affordability is assessed as a ratio between charges and income. The charges are calculated for a baseline – the Essential Minimum Quantity – and three other scenarios. Concerning the households’ income this research considers two different measures. The results show significant differences between municipalities. Although, on average, and for all municipalities, affordability measures do not put into question the threshold of 3%. Nonetheless, for numerous and low-income families, water services affordability in Portugal is justifiably a source of concern.