A meta-analysis of residential water demand studies

Abstract

Although widely studied, the residential water demand remains a controversial issue. The purpose of the current study is to investigate systematic variations across related studies using meta-analysis approach. Particularly, a meta-analytical regression is performed to assess the sensitivity of the price, income and household size elasticities to a number of characteristics including demand specification, data characteristics, price specification, tariff structure, functional form, estimation technique and location of demand. The empirical results of the study reveal that these characteristics have differing influence on the reported elasticities. Obviously, these findings lie in their importance for regulators and policy makers and for academics alike. Among others, two important conclusions emerge. First, water use in summer and winter seasons and water use for indoor and outdoor purposes are found to be important factors affecting the price elasticity. This suggests that peak-load water pricing may be an effective tool for managing water demand. Second, the three elasticities tend to be differently estimated across various regions of the world as well as between developed and developing countries. Therefore, decision makers in a given country would not rely on the findings of studies conducted on other countries in formulating their policies.