The Economics of Household Demand for Water: The Case of Kandy Municipality,Sri Lanka

This study estimates the demand for domestic water in a fast-growing city of a developing country. Monthly data for 40 randomly selected households for a six-year period were used for the estimation. There were three price hikes during the study period, which provided adequate variation in the prices for an econometric estimation. A log-log model was selected as a proper specification for the demand function. Marginal price, difference price, income, and household size were used as the independent variables. After correcting the data for auto-correlation and heteroscedasticity, the final model was estimated. Results show all the expected signs with statistical significance. Price elasticity (marginal) and income elasticity for water in the study area are estimated to be - 0.34 and 0.08, respectively. Thus, our findings confirm the previous findings that water is neither price- nor income-elastic. Given these responses, a price hike may not help conserve water in the study area. However, very low price responsiveness can be used to increase water revenues of the municipality.     

基于ELES模型的城镇居民生活用水水价支付能力研究——以北京市为例

本文从支付能力的角度,根据计量经济学的需求函数理论,以我国城镇居民消费支出结构数据为基础,提出了应用扩展线性支出系统(ELES)模型,分析城镇居民生活用水水价支付能力。以北京市为例,采用1998～2004年截面数据资料,计算分析了不同时期居民用水需求与水费支出水平、居民用水的边际消费倾向、需求收入弹性以及不同收入户的用水基本需求等,以此定量研究了北京市城镇居民生活用水水价的支付能力。研究结果表明:平均收入水平下,居民对水价具有一定的支付能力,其基本用水需求均能得到满足;可支配收入增长对居民用水需求的影响不大;北京市生活用水水价还有上调的空间,但低收入户的水价支付能力有限,是重点考虑的对象。     

基于多智能体的城镇家庭用水量模拟预测分析

提出了基于多智能体的城镇家庭用水量模拟模型(MA-UHWDS),通过构造不同发展情景,对家庭用水量变化趋势及其影响因素进行了分析。以青岛市为实证城市,采用2003—2012年统计资料,计算分析了居民用水边际消费倾向、基本用水需求和不同收入户人均用水量,并对不同情景下2013—2022年各类收入户人均用水量和城镇家庭用水总量进行了定量模拟预测分析。结果表明:2003—2012年中,城镇家庭平均水费支出占总消费支出的比重仅为0.395%,易造成居民节水意识淡薄,最低收入户人均用水量除2008年外均低于基本需水量,而最高收入户平均超过基本需水量14.16 m3,水价改革需综合考虑低收入家庭的支付能力和高收入家庭的过度用水;2022年7类收入户在水价高增长收入低增长情景下的人均用水量与在水价低增长收入高增长情景相比下,分别减少了16.7%、18.4%、18.1%、16.1%、15.0%、17.8%和13.8%,水价和收入会明显影响家庭用水量。MA-UHWDS为区域用水总量调控提供了新的研究思路和工具。     

Urban Household Water Demand in Beijing by 2020: An Agent-Based Model

Beijing is faced with severe water scarcity due to rapid socio-economic development and population expansion, and a guideline for water regulation has been released to control the volume of national water use. To cope with water shortage and meet regulation goal, it has great significance to study the variations of water demand. In this paper, an agent-based model named HWDP is developed for the prediction of urban household water demand in Beijing. The model involves stochastic behaviors and feedbacks caused by two agent roles which are government agent and household agent. The government agent adopts economic and propagandist means to make household agent optimize its water consumption. Additionally, the consumption is also affected by the basic water demand deduced from extended linear expenditure system. The results indicate that the total water demand of urban households in Beijing will increase to 317.5 million cubic meters by 2020, while the water price keeps growing at a low level. However, it would drop to 294.9 million cubic meters with high growth of water price and low increment in per capita disposable income. Finally, some policy recommendations on water regulation are made.     

以水价改革促进水利改革

建设节水型社会要运用价格杠杆平衡水资源的供需,并通过水价调整促进水资源供给链改革.具体表现为以水资源费改革来推动水权配置与流域治理,以提高水利工程供水价格促进水管单位向企业化方向发展,以统一城市供水价格及污水处理费促进城市供水企业与污水处理企业的联合重组,通过优化水价结构,促进水利改革.     

Assessing and Modelling the Influence of Household Characteristics on Per Capita Water Consumption

Sustainable urban water supply management requires, ideally, accurate evidence based estimations on per capita consumption and a good understanding of the factors influencing the consumption. The information can then be used to achieve improved water demand forecasts. Water consumption patterns in the developed countries have been extensively investigated. However, very little is known for the developing world. This paper investigates per capita water consumption resulting from water use activities in different types of households typically found in urban areas of the developing world. A data collection programme was executed for 407 households to extract information on household characteristics, water user behaviour and intensity and the nature of indoor and outdoor water use activities. The rigorous statistical analysis of the data shows that per capita water consumption increases with income: 241, 272 and 290 l/capita/day for low, medium and high income households, respectively. Additionally, the results suggest that per capita consumption increases with the number of adult female members in the household and almost one-third of consumption is via taps. The collected data has been used to develop statistical models using two different regression techniques: multiple linear (STEPWISE) and evolutionary polynomial regression (EPR). The inclusion of demographic parameters in the developed models considerably improved the prediction accuracy. Two of the best performing models are used to forecast the water demand for the city, using four future scenarios: market forces, fortress world, policy reform and great transition. The results suggest that the domestic water demand would be highest in the fortress world scenario due to the increase in population and size of built-up area.     

Urban Sustainability Incentives for Residential Water Conservation: Adoption of Multiple High Efficiency Appliances

Effects of multiple types of water use efficiency appliances on long term water savings and water use trend shifts were analyzed. The study group included senior and low income families in the urban areas of Miami-Dade County, Florida, USA. The participants in the study group experienced continuous and significant water savings within 3 years of the implementation of the water conservation incentives. Water savings were observed at approximately 200 l per household per day, which is about 31 % reduction in household water demand in comparison to the average residential water demand within the County. The water use profile of participants showed noticeable shifts over time in water demand frequency curves toward lower water consumption rates. The cost-saving analysis showed that adoption of multiple water efficiency appliances contributed to the highest annual monetary savings (i.e., high water savings and moderate product costs). Future conservation program planning efforts should take both water savings and product cost into account in order to achieve the greatest benefits.     

Calculating Price Elasticity of Water Demand Using Gene Expression Programming Based on Economic,Social and Meteorological Variables

Determining the changing rate of water consumption through altering parameters such as water tariffs can help water companies select appropriate water policies. This paper is intended to find the proper relation between the water price elasticity of demand and some social, economic and climatic variables that are released annually by international organizations like the United Nations Development Program and the World Bank. By using genetic algorithm, different combinations of water price elasticity of demand and variables like gross domestic product, per capita gross domestic product, gross national income, precipitation, human development index, average temperature and household size have been analyzed. It was found that the absolute price elasticity of water demand has positive relationships with precipitation and price of water. It has also been found that the gross national income, average percent of consumers who have secondary education and human development index have a negative relation with the absolute price elasticity of water demand.

     

Determinants of Domestic Water Use by Rural Households Without Access to Private Improved Water Sources in Benin: A Seemingly Unrelated Tobit Approach

This paper analyzes the determinants of domestic water use in rural areas. The focus is on households without access to private improved water sources. These households use either only free sources, only purchased sources or a combination of free and purchased sources. We also analyze households’ water use behaviors as a function of water availability by explicitly estimating domestic water use for both rainy and dry seasons. Using a Seemingly Unrelated Tobit approach to simultaneously account for the censored nature of water demand and the correlation of error terms between free and purchased water use equations, we find that purchased water demand is perfectly price inelastic due to water scarcity. The important determinants of water use are household size and composition, access to water sources, wealth and time required for fetching water. Nevertheless, the effects of these determinants vary between household types and seasons, and the policy implications of the findings are discussed.     

Factors Influencing Per Capita Water Consumption In Urban Areas Of Developing Countries And Their Implications For Management,With Special Reference To The Khartoum Metropolitan Area

ABSRTACT

The fast growing population in Third World countries and the limited physical resources in rural areas have led to the dramatic expansion of the urban areas of these countries. It is now recognized that when planning for the development of these areas, early consideration must be given to the difficulties and cost of providing potable water equitably to all users. Detailed studies are necessary for particular situations so as to provide a basis for better management practices.

Khartoum, a growing urban area in Sudan, has been chosen as a case study. A proposed framework and technique of analysis is shown. Factors influencingper capita consumption are correlated and mathematical models have been generated for the two distinct classifictions of consumers: (1) consumers with piped supply and (2) consumers obtaining water from water vendors or from standpipes (squatter settlements).

The most significant factors affecting the consumption appear in the fitted equations. Of these factors, the number of occupants in the household influences the per capita consumption but at a decreasing rate. Price has a significant impact on demand: price elasticities of about -0.60 and -0.78 are obtained for households with piped connections and squatter areas respectively. Water utility authorities can use price as a tool to ration or discourage water consumption in the piped connection households and to increase the rate of consumption in the squatter areas.     

Regional Differences in the Price Elasticity of Residential Water Demand in Spain

This paper explores the influence of regional climate variability on the elasticity of price for residential water demand in Spain. The data comes from the Spanish Survey of Family Budget (INE 2012), a national based survey of household living conditions including more than 15,000 observations. The econometric analysis included other determinants of residential water demand in Spain such as income and household characteristics. In line with the broad literature, the demand for water in Spain is found to be inelastic, although price elasticity differs notably when accounting for different climatic regions in the territory. The results have noteworthy policy implications as water pricing is considered an efficient means of long term sustainable planning of water resources management. The results imply that policy makers may have reasons to explore differentiating the impacts of water efficiency measures by region.     

Optimal Water Metering and Pricing

Marginal cost pricing of running water and sewerage services haslong been the default recommendation of economists and natural resource specialists to firms and local governments. However, optimal water rate calculation considering the optimal number ofmeters has not been thoroughly treated in the literature. The socially optimal number of meters crucially depends on the price of water charged by the Water Company. This is because whether or not metering is justified in economic terms will depend on the decline in water consumption and therefore in water production costs. This paper combines the optimal pricing and theoptimal metering issues in one optimization problem. Both in a centralized and in a decentralized way, the optimal number of meters is determined simultaneously with the optimal per unit water rate. The Rateable Value System (RV) (i.e. the Status Quo or benchmark regime) is confronted with Universal Metering (UM),Optimal Metering (OM) and Decentralized Metering (DM) in terms of optimal water rates and the socially optimal number of meters.Except for RV, the results of (UM), (OM) and (DM) all suggest that price should be set equal to marginal cost and that the optimal number of meters will be determined by a functional form combining water, metering costs and water demand characteristics. Conclusions and policy recommendations are drawn from the theoretical analysis.     

阶梯式计量水价在城市居民生活用水需求管理中的应用

基于计量经济模型,以北京市为例分析了水价对城市居民生活用水需求的影响,并进一步探讨了阶梯式计量水价在城市居民生活用水需求管理中的应用。     

Estimating Residential Water Demand Using the Stone-Geary Functional Form: The Case of Sri Lanka

This paper formulates a demand model for residential water in Sri Lanka using the Stone-Geary functional form. This functional form considers water consumption to be composed of two parts—a fixed and a residual component. The presence of these two components means it is possible to estimate a threshold below which water consumption is non-responsive to price changes. In turn, this can provide policy makers with a better understanding of the degree to which price changes will affect water consumption and the extent to which price instruments can be utilised to raise additional revenues. These revenues could then be used to extend pipe-borne water infrastructure to a greater proportion of the population than is currently the case. The findings presented here show the portion of water use that is insensitive to price changes in Sri Lanka is between 0.64 and 1.06 m³ per capita per month. The results indicate that price elasticity ranges from -0.11 to -0.14 while income elasticity varies from 0.11 to 0.14. Combined, these findings suggest water authorities could raise revenue via price increases to fund critical infrastructure extension.     

Household economic burden from seawater intrusion in coastal urban areas

ABSTRACT

This study quantifies the direct and indirect household economic burden of saltwater intrusion in Beirut, Lebanon, which experiences chronic water shortages. Incurred burdens include water purchase, reduction in the lifespan of household appliances, and building-level water treatment systems. Due to salinity, median household expenditure on water exceeds 6.5% of income, significantly higher than worldwide averages. A majority of affected respondents are willing to pay for mitigation measures to reduce salinity. The reported willingness to pay increased with education, income, salinity, and household expenditure on alternative water sources.     

Integrated Resource Planning for Water and Wastewater

Abstract

This paper describes the use of integrated resource planning for water and wastewater service provision by a major urban water utility. This methodology aims to meet the water and sewerage needs of the community at the least cost and includes an explicit analysis of the costs and benefits of measures that reduce the demand for water and the discharge of wastewater effluent. It therefore requires disaggregation of the demand for water into end-uses and a consideration of the linkages between the water supply and sewerage components of the business. This approach has significant advantages in economic, environmental, and social terms. The case study results indicate that significant investments in water efficiency programs are justified on economic grounds, particularly where augmentation of water and sewerage infrastructure is planned. Three studies undertaken as part of Sydney Water's efforts to integrate supply- and demand-side planning are described in this paper: first, a major integrated resource planning exercise designed to reduce demand for water by up to 35 percent, costing more than AU$25 million; second, a case study in a series of small towns where the benefits arise from reducing the capacity of sewage treatment plants by reducing wastewater flow; and third, in a major industrial region where water efficiency measures integrated with reuse measures reduce overall costs.     

Statistical Domestic Water Demand Model for the West Bank

Abstract

The water balance in the West Bank shows a severe deficit. Scenarios and strategies are formulated in order to overcome the deficit problem. These include options for better management of the existing water resources and the enhancement of new resources. This paper focuses on demand modeling as one of the key issues for effective water management. Although past literature about demand modeling is comparatively rich for different regions in the world, this research provides a unique study, due to the past political situation in the Middle East, for water demand modeling in the West Bank. The developed statistical domestic water demand model will assess the factors which influence domestic water use, and determine the parameters that may help in demand management. Rammallah City is used as a case study to illustrate the proposed framework of the analysis. The developed model indicates that water utility authorities can use price as a tool to ration water or encourage reduced water consumption in households.     

An Econometric Analysis of Residential Water Demand in Cyprus

This paper analyses econometrically residential water demand in the three major urban areas of Cyprus, a semi-arid country with medium to high income levels. Water demand turns out to be inelastic, but not insensitive, to prices; price elasticity is less than unity in absolute terms, but significantly different from zero. The analysis further shows that periodic interruptions in household water supply, which were applied as an urgent water saving measure in 2008–2009, did not encourage water conservation among the population. The paper discusses these results, pointing at the need for appropriate water pricing policies and long-term planning in order to move towards sustainable water resource management.     

城镇居民生活用水的计量经济学分析与应用实例

价格是影响用水的最主要因素之一。本文应用入户调查的数据，应用计量经济学方法分析了深圳市城镇居民生活用水的价格弹性和收入弹性；计算了假设的水价调整方案对深圳市城镇居民生活需水的影响，并提出了对深圳市水价调整的建议。分析结果表明，深圳特区内、外在用水行为和价格对用水的影响方面存在明显的差别，目前深圳的阶梯水价设置不合理；价格可以作为调整深圳水资源供需关系的有效手段；为了有效控制用水的快速增加，应同时调整价格水平和阶梯。