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Estimating household water demand using revealed and contingent behaviors: Evidence from Vietnam
Author(s) -
Cheesman Jeremy,
Bennett Jeff,
Son Tran Vo Hung
Publication year - 2008
Publication title -
water resources research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.863
H-Index - 217
eISSN - 1944-7973
pISSN - 0043-1397
DOI - 10.1029/2007wr006265
Subject(s) - water pricing , household income , water use , consumption (sociology) , water supply , agricultural economics , tariff , economics , non revenue water , water conservation , water resources , water resource management , natural resource economics , business , environmental science , environmental engineering , geography , ecology , social science , archaeology , sociology , international trade , biology
This article estimates the water demand of households using (1) municipal water exclusively and (2) municipal water and household well water in the capital city of Dak Lak Province in Vietnam. Household water demands are estimated using a panel data set formed by pooling household records of metered municipal water consumption and their stated preferences for water consumption contingent on hypothetical water prices. Estimates show that households using municipal water exclusively have very price inelastic demand. Households using municipal and household well water have more price elastic, but still inelastic, simultaneous water demand and treat municipal water and household well water as substitutes. Household water consumption is influenced by household water storage and supply infrastructure, income, and socioeconomic attributes. The demand estimates are used to forecast municipal water consumption by households in Buon Ma Thuot following an increase to the municipal water tariff to forecast the municipal water supply company's revenue stream following a tariff increase and to estimate the consumer surplus loss resulting from municipal water supply shortages.