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Residential Water Consumption: A Cross Country Analysis

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  • Grafton, R. Quentin
  • Kompas, Tom
  • To, Hang
  • Ward, Michael B.

Abstract

Survey data from over 1,600 households in ten countries were used to analyse the determinants of residential water demand. Results show that in every country the price elasticity is negative and statistically significant. Households that do not have to pay for the water they use (volumetric water charges) consume about a third more water than similar households that do have to pay such charges. Consumers’ attitudes do not have a statistically significant effect on total water use, although they do increase the probability of households using some water saving behaviours. Volumetric water charges also have an impact on the adoption of water saving actions. Full-cost water pricing appears to be a highly effective instrument to manage residential water demand.

Suggested Citation

  • Grafton, R. Quentin & Kompas, Tom & To, Hang & Ward, Michael B., 2009. "Residential Water Consumption: A Cross Country Analysis," Research Reports 94823, Australian National University, Environmental Economics Research Hub.
  • Handle: RePEc:ags:eerhrr:94823
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    References listed on IDEAS

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    Cited by:

    1. Gsottbauer, Elisabeth & Logar, Ivana & van den Bergh, Jeroen, 2015. "Towards a fair, constructive and consistent criticism of all valuation languages: Comment on Kallis et al. (2013)," Ecological Economics, Elsevier, vol. 112(C), pages 164-169.
    2. Nauges, Celine & Whittington, Dale, 2017. "Evaluating the Performance of Alternative Municipal Water Tariff Designs: Quantifying the Tradeoffs between Equity, Economic Efficiency, and Cost Recovery," World Development, Elsevier, vol. 91(C), pages 125-143.
    3. Grafton, R. Quentin & Chu, Long & Kompas, Tom, 2015. "Optimal water tariffs and supply augmentation for cost-of-service regulated water utilities," Utilities Policy, Elsevier, vol. 34(C), pages 54-62.
    4. David Hoyos & Alaitz Artabe, 2017. "Regional Differences in the Price Elasticity of Residential Water Demand in Spain," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 31(3), pages 847-865, February.
    5. Krishnamurthy, Chandra Kiran B. & Kriström, Bengt, 2015. "A cross-country analysis of residential electricity demand in 11 OECD-countries," Resource and Energy Economics, Elsevier, vol. 39(C), pages 68-88.
    6. Kiran B Krishnamurthy, Chandra & Kriström, Bengt, 2013. "A cross-country analysis of residential electricity demand in 11 OECD-countries," CERE Working Papers 2013:5, CERE - the Center for Environmental and Resource Economics, revised 30 Jun 2014.
    7. Aisbett, Emma & Steinhauser, Ralf, 2011. "Does anybody give a dam? The importance of public awareness for urban water conservation during drought," Research Reports 107850, Australian National University, Environmental Economics Research Hub.
    8. Jamal Othman & Goh Hong Lip & Yaghoob Jafari, 2014. "Benefits valuation of potable water quality improvement in Malaysia: the case of Kajang Municipality," International Journal of Water Resources Development, Taylor & Francis Journals, vol. 30(4), pages 621-634, December.
    9. repec:eee:rensus:v:81:y:2018:i:p1:p:1530-1547 is not listed on IDEAS
    10. Ghosh, Sanchari & Willett, Keith D., 2016. "Hydro-economic modeling of the benefits and costs of water management in the Santa Cruz border region," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 235663, Agricultural and Applied Economics Association.
    11. Céline Nauges, 2014. "Greening Household Behaviour and Water," OECD Environment Working Papers 73, OECD Publishing.
    12. Dália Loureiro & Aisha Mamade & Marta Cabral & Conceição Amado & Dídia Covas, 2016. "A Comprehensive Approach for Spatial and Temporal Water Demand Profiling to Improve Management in Network Areas," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 30(10), pages 3443-3457, August.
    13. Chih-Hao Wang & Hongwei Dong, 2017. "Responding to the Drought: A Spatial Statistical Approach to Investigating Residential Water Consumption in Fresno, California," Sustainability, MDPI, Open Access Journal, vol. 9(2), pages 1-15, February.
    14. Zhao, Jing & Ni, Hongzhen & Peng, Xiujian & Li, Jifeng & Chen, Genfa & Liu, Jinhua, 2016. "Impact of water price reform on water conservation and economic growth in China," Economic Analysis and Policy, Elsevier, vol. 51(C), pages 90-103.
    15. Fullerton, Thomas M., Jr. & White, Katherine & Smith, Wm. Doyle & Walke, Adam G., 2012. "An Empirical Analysis of Halifax Municipal Water Consumption," MPRA Paper 54113, University Library of Munich, Germany, revised 14 Mar 2013.
    16. Kenneth A. Baerenklau & Kurt A. Schwabe & Ariel Dinar, 2014. "The Residential Water Demand Effect of Increasing Block Rate Water Budgets," Land Economics, University of Wisconsin Press, vol. 90(4), pages 683-699.
    17. Griffin, Ronald C. & Mjelde, James W., 2011. "Distributing water's bounty," Ecological Economics, Elsevier, vol. 72(C), pages 116-128.

    More about this item

    Keywords

    water demand; water consumption; water pricing; Environmental Economics and Policy; Resource /Energy Economics and Policy; C21; Q25; Q50;

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General

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