Household Technology and the Domestic Demand for Water

Forecasts of domestic water demand in the United Kingdom-including those used in early regional planning exercises [UK Government, Water Resources Board, 1966, 1970, 1971] -have traditionally been prepared by local supply undertakings or catchment authorities. Traditionally, these demands have been met in full without recourse to rationing through consumption-related pricing policies. The experience of economic growth since 1950 and the costs now anticipated at new supply schemes are currently calling both these traditions into question, as evidenced by the administrative reorganization and discretionary metering powers envisaged in the 1973 Water Act [UK Government 1973]. The contribution of economic principles to efficiency in public water supply management lies in the demonstration of the interdependence of investment planning, pricing policy and demand projections, and of the influence on demand trends of more general attributes of the growth process. These ideas have been propounded in the context of electricity supply [Turvey 1968], and applications to the water industry have been essayed [Warford 1966; Hirschliefer et al. 1972]. The practical value of refining demand forecasts or of regulating household consumption by metering is, however, an empirical issue. Only if a structural explanation of demand can outperform rules of thumb, and only if the benefits from instituting metering outstrip the costs of such a policy, will resource savings be promoted. Evidence on demand behavior in the United Kingdom is necessarily slender, since in only one areaMalvern, in Worcestershire-is usage by individual households metered and subject to pro-rata charges. Much work aimed at the estimation of income and