The effect of pricing level to the loss of welfare costs (case study: Indonesia region II water company)

International Conference on Climate Change: Challenges and Opportunity on Environment Degradation Researches

地球科学;生态环境科学

B Rosalina, E.W.K.^1 ; Gravitiani, E.^2 ; Raharjo, M.^2 ; Mulyaningsih, T.^2

Magister Dept of Economics and Development Studies, Graduate School, Universitas Sebelas Maret, Jl. Ir. Sutami No.36A, Kentingan, Surakarta

57126, Indonesia^1

Dept. of Economy Development, Universitas Sebelas Maret, Surakarta, Indonesia^2

关键词: Economic efficiency;    Monopoly pricing;    Price ceilings;    Price determination;    Pricing decision;    Pricing levels;    Pricing rules;    Water companies;   

Others  :  https://iopscience.iop.org/article/10.1088/1755-1315/129/1/012013/pdf
DOI  :  10.1088/1755-1315/129/1/012013

学科分类：环境科学（综合）

来源: IOP

【 摘 要 】

Climate change makes the water balance composition being unstable, both quality and quantity. As a company which responsible for water management, Regional Drinking Water Company (abbreviated as PDAM) is often unable to solve the problem. Welfare costs are indicators to evaluate the economic efficiency. This study aims to calculate the welfare cost of the people lost due to the price determination of PDAM Indonesia in region II with deadweight loss (DWL) approach, so it can provide information to pricing regulator, pricing decision makers and for coIDRorate management. DWL is a loss of economic efficiency that can occur when equilibrium for a good or a service is not achieved, caused by monopoly pricing of artificial scarcity, an externality, a tax or subsidy, or a binding price ceiling or price floor such as a minimum wage. Results showed that the pricing rules set by PDAM yielded different DWL, depending on margin set by the company DWL PDAM ranges between IDR 260,485.66/M3to IDR 127,486,709.86/M3which is actually shared to improve the welfare of customers, other communities, and PDAM itself. Data analysis used PDAM performance in 2015 that have not Good CoIDRorate Governance Management and Efficiency.