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Keywords:

  • D61;
  • D63;
  • H42;
  • Q25

An assessment is provided of Melbourne's rising block tariff for water and its prescriptive regulation of water use through non-price restrictions. The three-step rising block tariff fares poorly on economic efficiency and on widely used notions of equity. A two-block tariff could remove much of the inefficiency in a three-block tariff, but one-price-for-all water would be the most efficient way to ration water on conventional definitions. The non-price restrictions on water use are prescriptive, denying households the opportunity to decide how to make any cuts in water use required of them. State values usurp private values.