AN ECONOMIST'S VIEW OF DEMAND PROJECTIONS CONSIDERING CONSERVATION1

ABSTRACT: This report places the engineering estimates of water conservation made by Sonnen and Evenson into the supply demand form used by most economists. Clarification is made concerning evaluation of conservation elasticities.     

CONSERVATION PRACTICES AND ATTITUDES AMONG MARYLAND WATER SUPPLY MANAGERS1

ABSTRACT: In addition to offsetting water supply shortages, water conservation is recognized as serving many purposes, ranging from reduced energy consumption to lower capital costs. Since the discussion of these benefits has been a recent development and has generally excluded local water supply managers, a question arises as to whether supply managers are implementing conservation programs to exploit these benefits. A survey of the managers at 35 Maryland water utilities provides insight into the prevailing attitude toward conservation in a water rich eastern state. The results indicate that most managers continue to view conservation only as a short term response to temporary supply shortages. Only 12 Maryland utilities have undertaken any form of water conservation activity and just two systems have ongoing, comprehensive conservation programs. Institutional, perceptual, economic, political, and time constraints all contribute to the managers’attitudes and general inaction. If water conservation is to be widely practiced, these issues must be addressed and the benefits attributed to conservation must be better documented and articulated to supply managers.     

NONPRICE WATER CONSERVATION PROGRAMS AS A DEMAND MANAGEMENT TOOL1

ABSTRACT: Water providers nationwide are implementing nonprice conservation measures such as education, public information, appliance retrofit and ordinances, with the expectation that these programs will reduce residential water demand. However, little empirical information exists on the effectiveness of nonprice conservation programs in reducing water demand. Previous econometric studies indicate these programs have had minimal impact. We examine the types and number of major nonprice conservation programs that have been implemented during an 11-year period in seven cities in the southwestern United States. A cross sectional, monthly time series residential water demand model, with parameters to control for variation in prices, temperature, precipitation and other factors, was used to empirically investigate the effectiveness of nonprice conservation programs in reducing water demand. We found significant reductions in use ranging between 1.1 percent and 4.0 percent per program. Because of the lack of information, we were unable to distinguish the effectiveness of individual or specific types of programs. Beyond finding that nonprice programs can be effective in reducing demand, questions regarding the efficiency and benefits to be achieved by conservation remain. As a step towards separating and evaluating the effects of individual programs, program benefits and efficiency, we recommend that utilities maintain more detailed and consistent information regarding the implementation of their nonprice programs.     

ACHIEVING URBAN WATER CONSERVATION1

ABSTRACT: Increasing costs and competition for water have resulted in pressure to manage urban water demand through conservation programs. Metering, pricing, devices, restrictions, building code changes, and horticultural practices have all been effective in reducing average residential water use. Some conservation means are specifically aimed at reducing peak demands but these usually reduce average usage as well. Combined programs of conservation can be expected to reduce urban demand by as much as 25–30 percent over the long term. Restrictions can reduce water usage on the short term even further. The success of conservation programs is as dependent on the effectiveness of public education and information dissemination as on the conservation practices themselves.     

MUNICIPAL UTILIZATION OF WATER DEMAND MANAGEMENT: THE ONTARIO EXPERIENCE1

ABSTRACT: Managing the demand for municipal water supply has become a viable alternative or supplement to traditional supply management responses. Though senior governments in Canada are committed to the concept, there is a lack of knowledge concerning the level of use of the demand management concept and little promotion of water conservation. This paper assesses the extent of the use of this concept as it applies to municipal water supply across southern Ontario and examines factors that influence the variation in use of water conservation strategies. Information from 219 municipalities revealed that the concept is not in wide use in southern Ontario and that existing variation can be partially explained by the extent of problems experienced and the population size served by the municipal water supply system. Suggestions for increasing municipal use of the demand management concept are offered.     

AN ECONOMIC ANALYSIS OF WATER CONSERVATION POLICY1

Water conservation is a much emphasized policy of the Federal government. Discussion of water conservation proposals often involves confusion between a conservation “ethic,” which is an end in itself, and conservation as a means for attaining various economic objectives. Analysis indicates that outside of ground water “mining.” water is usually a renewable and reusable resource. During periods of normal precipitation, water conservation should be employed only when the value of the water saved exceeds the cost of effecting the savings. Water conservation is most valuable as a drought contingency tactic. Water conservation as a substitute for structural provision to meet normal water demand growth is apt to prove shortsighted.     

EFFECT OF PRICE STRUCTURE ON RESIDENTIAL WATER DEMAND1

ABSTRACT: Little is known about how different types of municipal water rate structures influence residential water use. Conventional wisdom suggests that increasing block rate structures promote conservation, but analysis of data from 85 Massachusetts communities does not support this view.     

PEAK PERIOD DESIGN STANDARDS FOR SMALL WESTERN U.S. WATER SUPPLY SYSTEMS1

ABSTRACT: In order to determine design capacities for various components of municipal and rural domestic water supply systems, engineers must estimate water requirements for an entire year (water rights), for the peak season (reservoir storage), for the peak day (pump or treatment plant size), and for peak hour (pipeline sizes). Historically, per capita water use rates have varied greatly between systems, particularly in semiarid regions where outdoor demands are large. The resulting uncertainty in design capacity estimates can cause either inadequate capacities or premature investment. In order to minimize that uncertainty multiple regression and frequency analyses were made of the various water demand parameters mentioned above for 14 systems in Utah and Colorado. Specifically, demand functions are reported for average month, peak month, and peak day. Peak hour demands were also studied but are reported in a different paper. The independent variables which were significant for monthly and daily demands were price of water and an outdoor use index which includes the effect of variation in landscaped area and accounts for use of supplementary ditch or pressure irrigation systems. The demand functions were developed with data from systems varying in size from very small low density rural systems to Salt Lake City's water system. The correlation coefficients (R²) vary from 0.80 to 0.95.     

RESIDENTIAL WATER DEMAND: A POOLED,TIME SERIES,CROSS SECTION STUDY OF MALMÖ, SWEDEN1

Shortcoming associated with past water demand studies are evaluated. To overcome these shortcomings, pooled, time series, cross section data from -6, Sweden, are used in an ordinary Least squares analysis to estimate the demand for residential water. Elasticities for five variables, including price and income, are estimated. An approach for the conduct of future water demand studies is suggested.     

INDUSTRIAL WATER DEMAND WITH WATER REUSE1

ABSTRACT: This work establishes an industrial water demand (IWD) model for a short term estimate, which considers water reuse technologies and discharge regulations, for the integrated circuit (IC) industry in northern Taiwan. Based on the optimization of an industrial water cost system, a computerized system dynamics model (SD model) is developed to generate individual firm IWD using data from year 2000. A market IWD is further constructed for 25 1C firms in the study area and is approximated by an inverse logistic curve. Analytical results demonstrate that price elasticity varies with water price in cases involving water reuse.     

THE NATURE OF LONG RUN COST SAVINGS DUE TO WATER CONSERVATION1

Savings in capital, operation, and maintenance costs of new water supply facilities are referred to as “long run foregone costs.” Any conservation measure leads to reduction of water use or loss, however, significant long run foregone costs are realized only when reductions in size or delays in construction of facilities result. In order to accurately evaluate these costs it is necessary to know which facilities are affected and how they are affected (i.e., eliminated, downsized, or delayed). The effects of several levels of conservation on long run fore gone costs for an actual study are presented and some easy to use equations that may be used to calculate such savings are then derived. Some rules are presented to determine if it is more economical to delay construction or downsize facilities.     

USE AND MISUSE OF COMPLEX MODELS: EXAMPLES FROM WATER DEMAND MANAGEMENT1

ABSTRACT: The power of computers has increased in recent decades, and one might expect improved management to result because decisions can be made with understanding available only via models. However, there is potential for quite the opposite: poor decisions due to unrealistic model output generated by users without access to appropriate training in the use of models. We discuss and, by reference to water demand models (IWR-MAIN, MWD-MAIN), illustrate three areas in which unintended errors of judgment by untrained personnel may cause difficulty:

• * Attributes of management models; if output from any type of model has no measure of confidence, then results may be over- or undervalued
• * Input data; with complex models, problems here typically will be difficult to detect.
• * Calibration and history-matching (verification); if these steps or data are combined, then users should be less trustful of model output than otherwise.

Because all models have weaknesses and because there always is uncertainty about output from any model, we end with suggestions for coping with complex models. Monitoring programs play a central role in such efforts because they can identify discrepancies between model predictions and actual events and because they can ensure time is available to develop solutions for problems unanticipated in the modeling effort.     

RURAL RESIDENTIAL WATER DEMAND: AN ECONOMETRIC AND SIMULATION ANALYSIS1

ABSTRACT: This study proposes that demand management through pricing policies can be used in conjunction with supply management to solve water supply problems. Economic principles are shown to apply to rural residential water use. A demand function for water was developed based on cross-sectional water use data collected in Kentucky. Price was found to be a significant determinant of the quantity of water demanded. A constant price elasticity of -0.92 was found. The demand function was used in a simulation analysis to determine reservoir capacity needed to supply water needs of a rural community. The simulation revealed that price can significantly affect required reservoir storage.     

A MONTHLY TIME SERIES MODEL OF MUNICIPAL WATER DEMAND1

A multivariate time series model is formulated to study monthly variations in municipal water demand. The left hand side variable in the multivariate regression model is municipal water demand (gallons per connection per day) and the right hand side contains (explanatory) variables which include price (constant dollars), average temperature, total precipitation, and percentage of daylight hours. The application of the regression model to Salt Lake City Water Department data produced a high multiple correlation coefficient and F-statistic. The regression coefficients for the right hand side variables all have the appropriate sign. In an ex post forecast, the model accurately predicts monthly variations in municipal water demand. The proposed monthly multivariate model is not only found useful for forecasting water demand, but also useful for predicting and studying the impact of nonstructural management decisions such as the effect of price changes, peak load pricing methods, and other water conservation programs.     

THE W-INDEX FOR RESIDENTIAL WATER CONSERVATION1

ABSTRACT: An index of residential water efficiency - a “W-Index” - can serve as a measure of effectiveness of water conservation features in the home. The index provides a calculated numerical value for each dwelling unit, derived from the number and kind of water-saving features present, including indoor and outdoor water savers and water harvesting or recycling systems. A W-Index worksheet, devised for on-site evaluation of single-family residences in the Tucson, Arizona, region shows that a nonconserving residence with all the water-using features would use 151,000 gallons per year or 148 gallons per capita per day (gpcpd), while the fully conserving model would use 35,300 gallons per year or 35 gpcpd and with water harvesting and graywater recycling systems would have a maximum W-Index of W-160. A Tucson water conservation demonstration home, Casa del Agua, received a rating of W-139, and field tests of about 30 homes in new Tucson subdivisions show values ranging from W-75 to W-100, indicating the incorporation of some water conservation in current new models. By adjustment of some climatic or water-use parameters, the W-Index format can be applied to various types of dwelling units or to other urban areas. The W-Index can be used by individual homeowners or builders to evaluate water efficiency of residential units, or by water providers or water management agencies as a device for promoting and achieving water conservation goals.     

EVALUATING THE PERSISTENCE OF RESIDENTIAL WATER CONSERVATION: A 1992–1997 PANEL STUDY OF A WATER UTILITY PROGRAM IN DELAWARE1

This study systematically evaluates residential consumer responses to a utility conservation initiative based on an econometric analysis of a sample of 510 households served by Artesian Water Company, Inc. (New Castle County of Delaware). Using a panel study approach covering the period from 1992 to 1997, this study shows that Artesian's water conservation program has had statistically significant and persistent impacts on residential water consumption.     

Residential Demand for Water in the Chicago Metropolitan Area1

Mieno, Taro and John B. Braden, 2011. Residential Demand for Water in the Chicago Metropolitan Area. Journal of the American Water Resources Association (JAWRA) 47(4):713‐723. DOI: 10.1111/j.1752‐1688.2011.00536.x Abstract: This paper provides the first contemporary analysis of residential water demand in humid Northeastern Illinois, in the vicinity of Chicago, and explores seasonal and income‐based differentials in the responsiveness of water use to water prices. Using a panel of system‐level data for eight water systems and controlling for seasons, weather, incomes, and community characteristics, the analysis yields low estimates of price elasticity of demand for water in line with other studies. Furthermore, price response is greater in summer and less in higher income communities. We suggest that use of seasonal pricing can help mitigate equity issues arising from differential income elasticities while taking advantage of the greater price responsiveness of summertime water use.     

MUNICIPAL WATER CONSERVATION ALTERNATIVES1

ABSTRACT: The municipal water conservation options available to meet the goals of a national water conservation policy are evaluated. Water conservation with water conservation devices is shown to offer many significant advantages over education and pricing and metering as a method of accomplishing water conservation goals. Current constraints on the use of water conservation devices are outlined, and their elimination is suggested if the nation's water conservation goals are to be met.     

RESIDENTIAL WATER DEMAND IN METRO MANILA1

ABSTRACT: An econometric demand function is estimated for residential water use in Metropolitan Manila. Regression results using annual time series data from 1970 to 1981 show that residential water consumption responds to changes in economic variables. Residential demand showed an income (household) elasticity of 0.542 and a combined price elasticity of -0.287. Implications for planning and management are discussed.     

EFFECT OF PRICE ON THE RESIDENTIAL DEMAND FOR WATER WITHIN AN AGENCY1

ABSTRACT: This paper develops a model that can be used to forecast the residential elasticity of demand for water within a district. Long-term water conservation programs and revenue and cost decisions hinge crucially on a determination of this elasticity. This study then pools cross-sectional (census) and time series data to generate elasticity forecasts for the Oakland urban area.