Abstract
This paper explores water consumption in Dhaka city for better understanding of its usage, and considers the implications of findings from distributive rationale. Using 459 household survey data collected by BRAC Institute of Governance and Development (BIGD), this study estimates income elasticities of water consumption after controlling the effects of other covariates including wealth-proxies, location, household size, water bill and spatial zones using the instrumental variable regression (IVREG) and instrumental variable quantile regression (IVQREG) approaches. The latter has an additive advantage over the former as the IVQREG provides a more accurate picture of the relationship of water consumption with the income throughout the entire water consumption distribution. Using the fixed pay variable as instrument, findings reveal the strong evidence that income is endogenous. The IVQREG results show that income elasticities are heterogeneous and vary significantly across the water quantiles, implying inequality in water consumption. It also provides strong systematic evidence as income elasticity of water consumption decreases with the increase in percentile. Significant spatial inequality in water consumption from IVREG approach disappears as we use IVQREG. This also strongly supports the systematic evidence obtained. Therefore, it is imperative to introduce different tariff structures among different water consumer groups for bringing equity in water consumption and revenue generation. However, Dhaka Water Supply & Sewerage Authority (DWASA) must ensure smart water meter before implementing such tariff structure as we face severe challenges while measuring residential water consumption.
Highlights
Dhaka, currently the ninth largest city in the World and projected to be the fourth largest one by 2030, is the fastest growing and largest urban city in Bangladesh with a population density of 44,500/km2 (UN Habitat 2017; United Nations 2018)
The estimation of residential water consumption is straightforward as most of the households located in Dhaka city use the single source of water, namely Dhaka Water Supply & Sewerage Authority (DWASA)
The high average of water consumption for this study arises because of the following reasons: (a) water bill in some cases in some areas include sewage charges; (b) households using extra pumping machine to bring water often increase the speed of the meter and so it inflates the bill; (c) water bill reported by the owner of a holding, where a single meter is set for the holding, inflates the water bill and the water consumption, and this is a very common scenario in case of water usage in Dhaka city; (d) household water consumption is adulterated with water usage by enterprises/businesses such as restaurants and groceries attached to the households
Summary
Currently the ninth largest city in the World and projected to be the fourth largest one by 2030, is the fastest growing and largest urban city in Bangladesh with a population density of 44,500/km (UN Habitat 2017; United Nations 2018). Ensuring equitable and affordable access to water to ever-growing population in Dhaka city has become a growing concern and a big challenge for the Dhaka Water Supply & Sewerage Authority ( DWASA). Demand-supply gap, quality and equitable distribution of water have become a growing concern in many urban cities of the developing countries like Bangladesh. Water management policy response to water demand challenges in Dhaka city has become imperative for improving both distributive as well as allocative perspectives. It urges to explore the causes of variations in water consumption among the residential water consumers (Schleich and Hillenbrand 2009) using micro-level data. Water policy makers require evidence-based recommendations with a view to devising cost-effective water delivery options for the growing population in Dhaka city
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