Estimation of Residential Water Demand under Uniform Volumetric Water Pricing
Publication: Journal of Water Resources Planning and Management
Volume 142, Issue 2
Abstract
Understanding the factors affecting residential water demand is critical to implement and to improve water management policies during the extreme climate conditions such as drought. As few studies relating water demand to uniform volumetric water pricing exist, this study aims to determine the price and income elasticity of residential water demand under uniform water pricing. Second, this study compares the elasticity of both marginal and average pricing for predrought and during-drought periods and seasonal low and high consumption periods. Individual household water consumption, household age, household value, parcel size, water price, and weather variables from July 2009 through December 2012 for the Oklahoma City area, OK were used. A two-stage least-squares estimation with an instrumental variable was used to develop a water demand model. Results indicate that water demand was inelastic to water price except for high-consumption periods. Parcel size, income, and temperature were positively related to water demand while rainfall, household age, and water price negatively influenced water demand. This study provides important insights into the major variables affecting water demand using easily-obtained data.
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Acknowledgments
We are grateful to the Oklahoma City Water Utilities Trust for providing funding for this project and to the Oklahoma City Utilities personnel who assisted with this study. This work was also partially funded by the USDA National Institute for Agriculture Hatch Project #OKL02852. We are thankful to Dr. Wade Brorsen (Oklahoma State University) for his review and suggestions. The authors thank to the anonymous reviewers for their comments on the previous version of this manuscript.
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Published In
Journal of Water Resources Planning and Management
Volume 142 • Issue 2 • February 2016
Copyright
© 2015 American Society of Civil Engineers.
History
Received: Oct 6, 2014
Accepted: Jun 25, 2015
Published online: Sep 4, 2015
Published in print: Feb 1, 2016
Discussion open until: Feb 4, 2016
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