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Advances in the Economic Analysis of Residential Water Use

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A special issue of Water (ISSN 2073-4441). This special issue belongs to the section "Water Use and Scarcity".

Deadline for manuscript submissions: closed (30 November 2017) | Viewed by 71276

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Special Issue Editors

Dr. Arnaud Reynaud

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Guest Editor

Toulouse School of Economics & INRA
Interests: natural resources economics; water economics; risk management; applied econometric; stated preferences

Prof. Dr. Giulia Romano

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Guest Editor

Università di Pisa, Pisa, Italy
Interests: corporate governance; utilities management and policy; water management; waste management; performance measurement
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Special Issue Information

Dear Colleagues,

This Special Issue aims at gathering 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. This is a puzzling result 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 expected. 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 NPP for curbing residential water use. In particular, contribution regarding costs and benefits of using NPP, and persistence over time of the effects of NPP, would constitute valuable inputs for this Special Issue.

Dr. Arnaud Reynaud
Dr. Giulia Romano
Guest Editors

Manuscript Submission Information

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Keywords

residential water use
price policies
non-price policies
household behaviors
smart meter
water price elasticity

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Published Papers (10 papers)

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10 pages, 227 KiB

Open AccessArticle

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

by Arnaud Reynaud and Giulia Romano

Water 2018, 10(9), 1162; https://doi.org/10.3390/w10091162 - 30 Aug 2018

Cited by 27 | Viewed by 6839

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”. Full article

(This article belongs to the Special Issue Advances in the Economic Analysis of Residential Water Use)

18 pages, 2288 KiB

Open AccessArticle

Unauthorised Domestic Water Consumption in the City of Alicante (Spain): A Consideration of Its Causes and Urban Distribution (2005–2017)

by Álvaro-Francisco Morote and María Hernández-Hernández

Water 2018, 10(7), 851; https://doi.org/10.3390/w10070851 - 26 Jun 2018

Cited by 20 | Viewed by 5752

Abstract

Since 2014 and 2015 numerous projections and macroeconomic indicators have shown sustained growth, allowing governments to affirm that the economic crisis has been overcome. In Spain, the onset of the crisis and the bursting of the real estate bubble (2008) have caused a profound impression on the country and society in recent years. The aim of the study is to analyse the evolution and the determining factors of unauthorised domestic water consumption and its geographic distribution in the city of Alicante (south-east Spain). Methodologically, data have been examined regarding this topic in the city of Alicante for the period 2005–2017 and according to their location and the type of residential property (compact or dispersed). In conclusion, it should be indicated that in Alicante unauthorised consumption is recorded in all social classes and neighbourhoods, especially in the properties of the North District of the city (a lower economic income neighbourhood) but also in those ones that are home to the better-off social classes who reside in detached houses. In the latter, residents commit unauthorised consumption to reduce the high levels of water consumption, aggravated by the current drought (the need to provide greater volumes of water for outdoor uses) and by the increase in the price of water over the last decade. Besides, since the implementation of the Remote Meter Reading Plan in 2011 and the increase of the surveillance of the employers of the water company, the detection of the unauthorised water consumption has increased. Full article

(This article belongs to the Special Issue Advances in the Economic Analysis of Residential Water Use)

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18 pages, 1928 KiB

Open AccessArticle

Performance Analysis of Ageing Single-Jet Water Meters for Measuring Residential Water Consumption

by Francisco J. Arregui, Francesc J. Gavara, Javier Soriano and Laura Pastor-Jabaloyes

Water 2018, 10(5), 612; https://doi.org/10.3390/w10050612 - 8 May 2018

Cited by 23 | Viewed by 8906

Abstract

Single-jet meters are one of the most frequently used domestic meters that can be found in water distribution systems. Like any other water meter technology, they have significant metrological limitations that prevent them, even if recently installed, from measuring all water consumption of a domestic customer. After installation, their metrological characteristics evolve depending on the particular design of the meters and their actual working conditions in the field. This work presents a comprehensive set of tests to determine the initial and after installation weighted error of two types of domestic single-jet water meters. Three non-linear degradation models have been derived from the tests results. These models consider age, totalised volume, or both parameters simultaneously as drivers of the weighted error. The results show that even though the construction of the two examined meters is similar, they have been working under comparable operational conditions and measuring water of the same quality, there is a significant difference in the performance between both types. This result highlights the need to conduct individual analyses for each meter type and the impossibility of generalizing conclusions on how the weighted error could evolve over time. Full article

(This article belongs to the Special Issue Advances in the Economic Analysis of Residential Water Use)

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18 pages, 267 KiB

Open AccessArticle

Household Water Demand in Andorra: Impact of Individual Metering and Seasonality

by Arnaud Reynaud, Marc Pons and Cristina Pesado

Water 2018, 10(3), 321; https://doi.org/10.3390/w10030321 - 14 Mar 2018

Cited by 18 | Viewed by 7757

Abstract

Despite the large literature focused on residential water use, our knowledge of the impact of individual metering on household water consumption remains limited. Our work aims to fill this gap by providing the first estimate of the residential water demand function in the Principality of Andorra, where collective and individual metering coexists. Using a panel dataset covering the years 2006 to 2015, we propose estimating a domestic water demand function for the municipality of Andorra La Vella (the capital of Andorra). Our estimates reveal a price elasticity of the residential water demand equal to –0.7. Facing a price increase of 10 percent, households will react in the short run by reducing their water consumption by 7 percent. Interestingly, the price elasticity is found to be significantly different in single-family units compared to multi-family units. This may suggest a significant impact of individual metering on domestic water consumption in Andorra. Full article

(This article belongs to the Special Issue Advances in the Economic Analysis of Residential Water Use)

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10 pages, 399 KiB

Open AccessArticle

Still Waters Run Deep: Comparing Assertive and Suggestive Language in Water Conservation Campaigns

by David Katz, Ann Kronrod, Amir Grinstein and Udi Nisan

Water 2018, 10(3), 275; https://doi.org/10.3390/w10030275 - 5 Mar 2018

Cited by 15 | Viewed by 4974

Abstract

The current work focuses on non-price policies to achieve residential water conservation, specifically on water conservation campaigns. The authors report the results of a large-scale longitudinal field experiment encouraging residential water conservation among 1500 households. The effectiveness of two commonly-used message phrasings is compared: an assertive and a suggestive message. Assertive messages employ a commanding tone, such as “You must conserve water”, whereas suggestive messages employ a more gentle approach, as in “Please consider conserving water”. Despite the ubiquitous use of assertive phrasing in pro-social messages, and previous research that suggests that, in some cases, assertive language can increase message compliance, the authors show here that the suggestive, gentler, message language can make a more accentuated change in residential water conservation behavior. This may stem from the status of water as a basic needs resource, which may reduce the appropriateness of freedom restricting language, such as an assertive tone. Full article

(This article belongs to the Special Issue Advances in the Economic Analysis of Residential Water Use)

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26 pages, 1328 KiB

Open AccessFeature PaperArticle

Increasing Block Tariffs in an Arid Developing Country: A Discrete/Continuous Choice Model of Residential Water Demand in Jordan

by Christian Klassert, Katja Sigel, Bernd Klauer and Erik Gawel

Water 2018, 10(3), 248; https://doi.org/10.3390/w10030248 - 28 Feb 2018

Cited by 25 | Viewed by 7612

Abstract

Arid developing countries face growing challenges from water scarcity, which are exacerbated by deficient piped water supply infrastructures. Increasing block tariffs (IBTs), charging higher rates with increasing water consumption, can potentially reconcile cost recovery to finance these infrastructures with an equitable and affordable sharing of the cost burden. A firm understanding of the impacts of varying prices and socio-economic conditions on residential water demand is necessary for designing IBTs that promote these objectives. Consistently estimating water demand under an IBT requires a discrete/continuous choice (DCC) model. Despite this, few econometric studies of arid developing countries have applied this state-of-the-art approach. This paper applies a DCC model to estimate residential water demand under IBTs in the severely water-stressed country of Jordan, using 15,811 country-wide household-level observations from five years up to 2013. We extend Hewitt and Hanemann’s original DCC formulation in order to accommodate IBTs featuring a linearly progressive tariff block. We then use the resulting demand function to assess Jordan’s 2013 IBTs and alternative IBT designs. Under the estimated price elasticities, very few IBT designs achieve a full recovery of the financial costs of water provision, but we still identify a potential to improve cost recovery and affordability. Full article

(This article belongs to the Special Issue Advances in the Economic Analysis of Residential Water Use)

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22 pages, 1502 KiB

Open AccessArticle

Impact of a Programme for Water Affordability on Residential Consumption: Implementation of the “Programa Mínimo Vital de Agua Potable” in Bogotá, Colombia

by Laura Vargas, Sueli Aparecida Mingoti and Léo Heller

Water 2018, 10(2), 158; https://doi.org/10.3390/w10020158 - 6 Feb 2018

Cited by 4 | Viewed by 6409

Abstract

Affordability of services is a determinant for people’s level of access to water. In this study, we analyse the effect of a programme aimed at improving the affordability of water services on users’ water consumption. The programme was implemented in 2012 by the local government of the city of Bogotá, Colombia, intending to provide an essential “lifeline” volume of water to poor households free of charge. Our assessment was carried out with secondary data and used difference-in-difference estimators in a panel data analysis of a two-period sample: 2011 and 2014. The unit of analysis was defined based on the city’s administrative divisions and the socio-economic stratification of residences. Over the period analysed, beneficiaries’ household consumption increased, reaching per capita consumption levels closer to those of the upper strata of users. Results suggest that the programme contributes to increased consumption and equity among users. Full article

(This article belongs to the Special Issue Advances in the Economic Analysis of Residential Water Use)

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13 pages, 1601 KiB

Open AccessArticle

French Reed Bed as a Solution to Minimize the Operational and Maintenance Costs of Wastewater Treatment from a Small Settlement: An Italian Example

by Anacleto Rizzo, Riccardo Bresciani, Nicola Martinuzzi and Fabio Masi

Water 2018, 10(2), 156; https://doi.org/10.3390/w10020156 - 6 Feb 2018

Cited by 19 | Viewed by 6465

Abstract

French Reed Bed (FRB) is a particular constructed wetland (CW) solution which receives raw wastewater. Data from the full-scale FRB wastewater treatment plant of Castelluccio di Norcia (center of Italy) were collected to show the FRB capability to minimize the operational and management (O&M) costs. The system was designed to treat wastewater variable from 200 person equivalent (PE) in off-season up to 1000 PE. Data from 2014 up to 2016 showed high removal efficiency in line with French experiences with FRBs. An interview was conducted with the Water Utility to estimate the operational and maintenance (O&M) costs faced by the WWTP, which allowed us to detail the O&M costs for energy consumption, water quality samples, and personnel for inspection. Other O&M expenditure items were estimated on the basis of parametric costs from the executive design. The FRB O&M costs in euro for 500–1000 PE (6–11 € PE⁻¹ year⁻¹) resulted from 5 to 13 lower in comparison to those reported for classical activated sludge systems in an Italian context (45–90 € year⁻¹). The low O&M costs are mainly due to the limited energy consumed and to the minimized costs of sludge management. Full article

(This article belongs to the Special Issue Advances in the Economic Analysis of Residential Water Use)

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12 pages, 561 KiB

Open AccessFeature PaperArticle

Operating Cost Coverage vs. Water Utility Complaints

by Konstantinos P. Tsagarakis

Water 2018, 10(1), 27; https://doi.org/10.3390/w10010027 - 1 Jan 2018

Cited by 7 | Viewed by 6073

Abstract

In addressing the topic of decision making in the water sector, what has been suggested to be useful up to this point is benchmarking. This paper aims at exploring the relationship between the Operating Cost Coverage Index and customer complaints about water and wastewater services for 1898 water utilities in 11 countries, i.e., Australia, Bangladesh, Brazil, Lithuania, Peru, Poland, Russia, Serbia, Tanzania, Zambia, and Zimbabwe. The data used are the most recent available per country through the International Benchmarking Network for Water and Sanitation Utilities (2013–2016). In order to examine the aforementioned relationship and further reveal the key policy messages that are derived by this analysis, parametric and non-parametric group comparisons are employed. The results of those comparisons concerning the two examined indicators of this study consist of two main findings: The first sheds light on the rational argument that well performing utilities open their data to others—at least more so than those not performing as well. The second is that there could be an association between financial performance and the complaints received about water and wastewater services, but this finding requires further investigation. Full article

(This article belongs to the Special Issue Advances in the Economic Analysis of Residential Water Use)

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828 KiB

Open AccessArticle

The Impact of Demographic Factors, Beliefs, and Social Influences on Residential Water Consumption and Implications for Non-Price Policies in Urban India

by Elizabeth Ramsey, Emily Zechman Berglund and Rohit Goyal

Water 2017, 9(11), 844; https://doi.org/10.3390/w9110844 - 2 Nov 2017

Cited by 47 | Viewed by 9050

Abstract

In rapidly growing urban areas in India and the developing world, water demands typically exceed supply. While local governments may implement management programs to reduce demand for freshwater, water savings are dependent on the conservation behaviors of individuals. A household survey is presented here to examine residential water end uses and conservation behaviors in Jaipur, India. The survey explores end uses, engagement in conservation behaviors, and the influence of demographic factors, water sources, beliefs about water, and social pressures on these behaviors are tested. The survey was conducted at 248 households, including 29 households in the slums. Our study finds that while the majority of participants recognize the importance of water conservation, they do not necessarily conserve water themselves. Households report engaging most frequently in water-conservation behaviors that require little effort or financial investment. Multivariate analysis of variance (MANOVA) results and subsequent pairwise comparisons indicate higher incomes, longer water-supply durations, and the belief that droughts are preventable are positively correlated with overall amenability to adoption of water-conservation behaviors and technology. Binomial logistic regression analysis indicates that being in the age group 26–35, having higher income, and giving a neutral response about the responsibility of the government to provide relief during a drought were all predictors of the installation of dual-flush (DF) toilets. Education levels and water awareness were found to have no correlation with conservation behaviors or amenability to conservation technology adoption. Results are applied to examine their possible implications from a demand-management perspective and provide suggestions for further research and policy decisions. Full article

(This article belongs to the Special Issue Advances in the Economic Analysis of Residential Water Use)

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