Title: Estimating residential water demand in the absence of volumetric water pricing

Authors: Eric E. Houk

Addresses: College of Agriculture, California State University, Chico, 217 Plumas Hall, 400 W. First St., Chico, CA 95929-0310, USA

Abstract: Rapid population growth has significantly increased the magnitude of water shortages in California. Although water shortages already exist, some of the state|s utility systems are still not providing their residents with financial incentives for water conservation. Instead of using water meters to charge households according to their actual water usage, they are charging a flat fee for unlimited water service. When flat fees are charged for unlimited water service, the per-unit cost for additional water is zero and the decision to consume more water is determined by other factors. This study estimates the factors that influence residential water demand in a city that is currently charging flat fees for unlimited water service. The results indicate that the number of home occupants and the square footage of grass landscaping significantly affect water usage and the relationships between these variables are quantified.

Keywords: economics; residential water demand; water meters; water price; volumetric water pricing; California; water shortages; financial incentives; water conservation; water usage; flat fees; unlimited water service; USA; United States.

DOI: 10.1504/GBER.2010.034893

Global Business and Economics Review, 2010 Vol.12 No.3, pp.196 - 202

Received: 27 Aug 2009
Accepted: 10 Feb 2010
Published online: 28 Aug 2010 *

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