Advances in the Economic Analysis of Residential Water Use: An Introduction

Giulia Romano,Arnaud Reynaud

doi:10.3390/w10091162

Abstract

The aim of this Special Issue is to gather evidence on the impact of price policies (PP) and non-price policies (NPP) in shaping residential water use in a context of increased water scarcity. Indeed, a large body of the empirical economic literature on residential water demand has been devoted to measuring the impact of PP (water price increases, use of block rate pricing or peak pricing, etc.). The consensus is that the residential water demand is inelastic with respect to water price, but not perfectly. Given the low water price elasticity, pricing schemes may not always be effective tools for modifying household water behaviors. This is puzzling since increasing the water price is still viewed by public authorities as the most direct economic tool for inducing water conservation behaviors. Additional evidence regarding the use of PP in shaping residential water use is then required. More recently, it has been argued that residential consumers may react to NPP, such as water conservation programs, education campaigns, or smart metering. NPP are based on the idea that residential water users can implement strategies that will result in water savings via changing their individual behaviors. Feedback information based on smart water metering is an example of approach used by some water utilities. There are still large gaps in the knowledge on the residential water demand, and in particular on the impact of PP and NPP on residential water use, household water affordability and water service performance. These topics are addressed in this Special Issue “Advances in the Economic Analysis of Residential Water Use”.

Highlights

This Special Issue of the Water Journal focuses on household water consumption defined as the quantity of water used to cover household and related utility needs of the population through the water supply industry and self-supply, calculated as a total and per capita
A high level of income is associated with high living standards, which could imply a higher quantity of water-consuming appliances and a higher probability of the presence of high-water demanding outdoor uses such as lawn gardens and swimming pools
Despite the empirical evidence accumulated on the residential water demand, there are still some gaps

Summary

Introduction

This Special Issue of the Water Journal focuses on household water consumption defined as the quantity of water used to cover household and related utility needs of the population through the water supply industry and self-supply, calculated as a total and per capita. Water demand modeling has taken on new importance with the need to better understand the role economic instruments (i.e., water pricing) might have to induce change in water user behaviors (i.e., reduction of water abstraction or polluted discharges). To this end, economists have developed a great variety of. Estimations of domestic water demand functions have been undertaken for a substantial number of countries all over the world, and the existing literature has already been summarized and reviewed by several authors [3,4,5]. We briefly review the existing scientific literature on household water demand modeling. We briefly conclude by presenting the nine articles which are part of this Special Issue

The Household Water Demand Approach

The Water Demand Function Approach

Theoretical and Empirical Considerations

Measuring Household Water Use

Water Price and Water Tariffs

Water Quality

Household Income

Population Characteristics

Housing Characteristics

Climate

Non-Price Policies

Attitudinal and Behavioral Drivers