The Economics of Water Demands (Natural Resource Management and Policy, 22)

This book arose out of a paper that I wrote for the World Bank at the request of Ariel Dinar, the editor for the series in which this volume appears. I began that paper by pointing to the growing importance of demand-side considerations in water resources: "The provision of potable water is one of government's oldest functions with evidence of this activity stretching back thousands of years. During much of that time, water demands were taken as exogenously given and the principle task of authorities was defined as an engineering one: how to supply a given quantity of water at least cost. In recent years, however, concerns have arisen from observations of excessive water use, degraded water quality and continued inadequate service for many, especially the very poor. As a result of these and other concerns, there is a growing effort to view water resource allocation from a perspective that incorporates consumers' preferences along with supply constraints into management plans. " (Renzetti, 2000, p. 123). The purpose of this volume is to examine, in greater detail than was possible in that article, what is known regarding the economic characteristics of the demand for water. Thus, this book is meant to be an extended critical review of the state of the art. The Economics of Water Demands includes discussions of many facets of water demands, including the economic theory of water demands, econometric and programming models of water demands, the results of empirical models, and the application of water demand information in the design of water management policies. The first section of the book critically assesses the state of knowledge regarding water demands in each of the major water-using sectors: residential, industrial, and agricultural. The second section examines the demand for sewage treatment and wastewater disposal, as well as water demands in low-income countries. The third section of the book considers the valuation of water use. The final section is concerned with the application of water demand information in the management of water and the forecasting of water demands. The book traces the historical development of economic research in each of the sections. The book also covers the most recent developments in the literature, including the role of risk in agricultural water demands, the estimation of discrete choice models of supply source choice by households in low-income countries, and use of ecological models to assess in-stream water demands Front Matter....Pages i-ix Introduction....Pages 1-6 The State of Water Use....Pages 7-15 Residential Water Demands....Pages 17-34 Commercial and Industrial Water Demands....Pages 35-49 Agricultural Water Demands....Pages 51-66 The Demand for Sewage Disposal and Waste Assimilation....Pages 67-80 Water Demands in Low-Income Countries....Pages 81-89 Value of Water in Extractive Uses....Pages 91-111 Value of Water in Non-Extractive Uses....Pages 113-130 Water Demand Management....Pages 131-144 Water Demand Forecasting....Pages 145-156 Conclusions....Pages 157-161 Back Matter....Pages 163-194