Price Responsiveness of Residential, Industrial and Commercial Water Demand in Sri Lanka

Appropriate pricing of water is critical for improving the efficiency of pipe-borne water supply systems in developing countries. This paper estimates the demand for pipe-borne water for residential, industrial and commercial sectors in Sri Lanka. Price elasticity for residential consumers ranges fr...

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Published in:The Asia Pacific journal of economics & business 2011-12, Vol.15 (2), p.17
Main Authors: Dharmaratna, Dinusha, Parasnis, Jaai
Format: Article
Language:English
Subjects:
Central banks
Consumers
Consumption
Demand
Developing countries
Drinking water
Elasticity of demand
Industrialized nations
LDCs
Literature reviews
Policy making
Price elasticity
Price increases
Pricing policies
Sanitation
Studies
Subsidies
Water supply
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Parasnis, Jaai
description Appropriate pricing of water is critical for improving the efficiency of pipe-borne water supply systems in developing countries. This paper estimates the demand for pipe-borne water for residential, industrial and commercial sectors in Sri Lanka. Price elasticity for residential consumers ranges from -0.06 to -0.58 and the income elasticity varies from 0.04 to 0.13. For the industrial and commercial sectors, price is not a significant variable in determining water demand. These findings suggest that price increases may not substantially reduce the demand for water. This paper provides the empirical foundations for pipe-borne water planning and policy-making in developing countries. [PUBLICATION ABSTRACT]
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subjects Central banks
Consumers
Consumption
Demand
Developing countries
Drinking water
Elasticity of demand
Industrialized nations
LDCs
Literature reviews
Policy making
Price elasticity
Price increases
Pricing policies
Sanitation
Studies
Subsidies
Water supply
title Price Responsiveness of Residential, Industrial and Commercial Water Demand in Sri Lanka
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