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Economics of Residential Water Demands

Domestic Water Supply

  1. Steven J. Renzetti

Published Online: 15 APR 2005

DOI: 10.1002/047147844X.dw19

Water Encyclopedia

Water Encyclopedia

How to Cite

Renzetti, S. J. 2005. Economics of Residential Water Demands. Water Encyclopedia. 1:12–16.

Author Information

  1. Brock University, St. Catharines, Ontario, Canada

Publication History

  1. Published Online: 15 APR 2005


This entry examines what is known regarding the economic characteristics of residential water use and how this type of information can be applied in managing water resources. Understanding the economic dimension of household water use is important for several reasons. First and most importantly, all households on the planet share the need for access to potable water supplies. On the other hand, households have very different degrees of access to safe water. For most of North America and Europe, access to clean water is almost taken for granted by many households. In contrast, a great number of households in low-income countries do not have access to reliable supplies of potable water. As the World Bank contends, “The challenge is enormous: one billion people still lack access to safe water, two billion lack safe sanitation. Slow progress is not acceptable, as more than three million children still die every year from avoidable water-related disease” (World Bank Water Supply and Sanitation web-site, September 1, 2001 Second, the agricultural sector dominates global water use, but residential and industrial demands have grown much more rapidly during the twentieth century. Third, empirical evidence indicates that the amount of water used by a household is a complex function of a number of influences, including the price of water (both in monetary terms and in time costs), household income, and household characteristics (for example, the number of residents and water-using appliances).


  • residential;
  • water use;
  • demand;
  • elasticity of demand;
  • price;
  • income;
  • willingness to pay;
  • forecasting