Hydrology,topography and demography matter: Why care needs to be exercised when assessing water prices and regulation and the extent to which they conform with best practice

Water tariffs frequently seek to achieve multiple objectives, some of which may conflict. However, the nature and rationale for those conflicts is not always understood or appreciated. This paper consider how localised natural and human phenomena can shape the extent to which so-called ‘best practice’ economic regulation and pricing can be expected to take hold in Victoria and South Australia. Overall, we find that there is room for improvement in the institutional arrangements that circumscribe water pricing in some cases, but direct comparisons are not always helpful, especially when the underlying hydrology, topography and demography of states differs markedly.