Is the “Upside-down” Category Pricing Really Unreasonable?——Evidence from China's Urban Water Industry

Abstract

Abstract: Chinese public utilities generally have “upside-down” classified pricing, which is a cross-subsidy in nature, and its impact on social welfare is controversial. By extending the Faulhaber paradigm to the case of ROR regulation, this paper proves that the cross-subsidy that meets the SAC and IC tests complies with the “Pareto Improvement” principle. Based on the empirical research of China's urban water supply industry, it is further discovered that the current classified pricing of public utilities in China has both horizontal subsidies and cross subsidies. What is unreasonable is not cross-subsidy, but the lagging adjustment of government pricing, which adds to the additional burden on enterprises and induces destruction of the optimal price structure. Flexible price adjustment cycle and reasonable subsidy ceiling will be two important aspects of future policy adjustments.

Key words: Public Utility Reform, Classified Pricing, Cross-subsidy, Urban Tap Water Pricing, Dynamic Welfare Analysis

摘要： 本文将Faulhaber范式扩展至ROR规制的情形,证明通过SAC和IC测试的交叉补贴符合帕累托改进原则。基于中国城市自来水行业的经验研究进一步发现,当前中国公用事业的分类定价同时具备水平补贴和交叉补贴的性质。不合理之处并非交叉补贴本身,而是政府定价调整滞后,增加了企业负担,进而引发企业破坏最优价格结构。灵活的价格调整周期与合理的补贴上限将是未来政策调整的两个重要方向。

关键词: 公用事业改革, 分类定价, 交叉补贴, 城市自来水定价, 动态福利分析

CLC Number:

F062

REN Jianxin, SHAO Bintao. Is the “Upside-down” Category Pricing Really Unreasonable?——Evidence from China's Urban Water Industry[J]. , 2021, 37(1): 104-114.

任剑新, 邵彬涛. “倒挂”的分类定价真的不合理吗？——来自中国城市自来水行业的证据[J]. 财经论丛, 2021, 37(1): 104-114.

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