Demand for Water under Dynamic Conditions

An empirical analysis of the effects on residential water use of changing from a flat rate price structure to a metered one is presented. Time series data, for the first time, are used to study the dynamics of residential water demand. The results include the observations that: (1) sprinkling demands were reduced by the introduction of meters, with actual sprinkling being greater than the calculated ideal under flat rates and less than ideal under metered rates; (2) sprinkling use not only declined with the introduction of meters but subsequently continued to decline; (3) domestic demands (in-house) were reduced by 36% after meter installation; and (4) domestic demands stabilized at these lower levels. The evidence generated by the analysis demonstrates that water users do not return to their old use patterns after meters are installed, and that metering results in a permanent and significant improvement in water use efficiency.