Content area
Full Text
The efficient use of water is necessary in water scarce regions like Barbados. This study provides an insight into the impact of two water demand management measures, water pricing and metering, on residential water use in Barbados. Econometric demand models of residential water use are developed to assess the potential of pricing policies to conserve water. The models are used as policy tools to investigate the impact of future increases in water price on water use and revenue generation, considering also the equity of price increases. Metering must be accompanied by a substantial increase in price to encourage water conservation.
Keywords: water demand management, pricing, metering, econometric demand modeling.
Introduction
The management of our water resources has predominately focused on augmenting supplies to meet the demands for water. Less attention has been given to the sustainable, efficient and equitable use of water. It is now globally recognised that more emphasis should be placed on managing water from the demand side, particularly as current water use is approaching the limits of sustainability in many regions due to either quantity or quality constraints.
Water demand management requires water managers to implement some means to decrease the quantity of water demanded while conserving supply sources to ensure sustainability of use (Moncur, 1987). Policy makers are now equipped with economic and non-economic instruments by which water demand may be influenced (or controlled) such as water pricing, metering, leakage reduction and awareness campaigns. Water demand models explain water demand as a function of a set of explanatory variables (income, price, rainfall, and so on.) and can help determine just how effective demand management measures are in reducing demand while maintaining equity. Following Howe and Linaweaver's 1967 study, most economic water demand analysis has consisted of developing and applying econometric demand models from which the price elasticity can be determined and used to understand customer responses to changes in water prices.
Water demand management becomes a necessity in water scarce countries such as Barbados. Barbados has recently been having difficulty meeting all its water demands as the sustainable extraction limit for their groundwater resources has been reached, so there has been a shift towards considering the demand-side alternatives of metering and pricing. This study looks at the impact of these...