Economics of Water Demands

Freshwater resources are growing increasingly scarce and conflicts over potable water are becoming more common. In order to deal with these problems and to allocate water, managers and water resource planners must have information regarding the nature of competing water demands. This is a comprehensive treatment of economic research directed at understanding the structure of water demands in over a decade. It 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. At the same time, the book also covers contemporary 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. The text demonstrates the value of applying economic theory and measurement techniques to water demands. The empirical evidence summarized here clearly shows the influential role played by water prices, other commodity prices, incomes, and other economic factors in determining the demand for, and the valuation of, water resources.