Abstract:
EU Water Framework Directive leads to manage water in an efficient way. Water scarcity originates frequently the need for rationing, and various methods, including supply interruptions, can be used. The aim of this paper is to evaluate the effectiveness and efficiency of those methods in reducing residential water consumption. We estimate a demand function segmented into two components in order to capture the proportion of water consumed by households under different supply cut schemes. We find that the reduction in consumption per hour of cut decreases with the length of the daily interruption. Thus, it is better to implement many short cuts than a few long cuts in order to achieve the targeted reduction in consumption, minimizing the total time of interruption. Additionally, we show the relative effectiveness of prices to control water demand.

This seminar is sponsored by the Environmental Economics Research Hub based at the Crawford School