Residential price elasticity of demand for water

This paper presents an analysis on price elasticity of demand for water as a consequence of price increases. The objective of this research study is to estimate the residential price elasticities of demand for water for different regions, which may have different income levels. The general conclusion is that price elasticity for residential water use is inelastic (i.e. a given percentage of price increase results in a proportionally smaller decrease in quantity demanded) and it varies by consumer class and type of water use. The elasticity is not significantly affected by demographic and other factors.