Ethiopia's municipal water systems face challenges in cost-effectiveness management due to variability in water demand and supply. A hybrid ARIMA-GARCH model was implemented using historical data from the Amhara regional state's municipal water systems. Uncertainty in forecasts is assessed via robust standard errors. The ARIMA-GARCH model predicted costs with an average absolute error of 12% and a confidence interval around predictions, indicating its reliability for cost-effectiveness analysis. The hybrid ARIMA-GARCH model provides a robust framework for forecasting municipal water system costs in Ethiopia's Amhara region. Cost-benefit analyses using these forecasts can guide policymakers in resource allocation and infrastructure development. ARIMA, GARCH, time-series forecasting, cost-effectiveness analysis, Ethiopian municipal water systems Model estimation used =argmin_ᵢ (yᵢ, f_ (xᵢ) ) +₂², with performance evaluated using out-of-sample error.
Tadesse et al. (Sat,) studied this question.