A model to assess water tariffs as part of water demand management

Abstract

Water Conservation and Water Demand Management (WC/WDM) forms part of integrated water resource management and can be used as an economically viable alternative to the upgrade of infrastructure to balance supply and demand. In order to enable effective decision-making, a model was developed in this study to estimate expected water savings and the financial impact of a change in water tariff as a WC/WDM measure. This paper describes a model that was developed for municipalities to calculate the predicted change in water use and the associated income. The model takes into account variation in price elasticity per tariff block. The effectiveness of the model as a planning tool is illustrated through an appropriate example.

Keywords: water demand management, price elasticity, change in water tariff, block tariff, WC/WDM model