Determinants of residential water consumption: Evidence and Analysis

Abstract

Household survey data for 10 countries are used to quantify and test the importance of price and nonprice factors on residential water demand and investigate complementarities between household water-saving behaviors and the average volumetric price of water. Results show (1) the average volumetric price of water is an important predictor of differences in residential consumption in models that include household characteristics, water-saving devices, attitudinal characteristics and environmental concerns as explanatory variables; (2) of all water-saving devices, only a low volume/dual-flush toilet has a statistically significant and negative effect on water consumption; and (3) environmental concerns have a statistically significant effect on some self-reported water-saving behaviors. While price-based approaches are espoused to promote economic efficiency, our findings stress that volumetric water pricing is also one of the most effective policy levers available to regulate household water consumption.