Technical Report No. 84
AN ECONOMIC ANALYSIS OF THE PATTERNS AND TRENDS OF WATER CONSUMPTION WITHIN THE SERVICE AREAS OF THE HONOLULU BOARD OF WATER SUPPLY
Ho-Sung Oh, Hiroshi Yamauchi
The objectives of this study are to construct and analyze the patterns and trends of water demand in the service areas of the Honolulu Board of Water Supply, and to identify factors affecting water demand with the intent of deriving useful policy implications as well as improving on urban water demand research. To accomplish the objectives, a thorough review of the literature was conducted and some suggestions for methodological improvement were developed. Classical univariate time series analysis, data disaggregation methods, and trend analysis were used to construct the patterns and trends of water consumption. Significant variables, which affect increasing per capita water consumption, were identified through a logical sequence of data processing and reasoning. The results were confirmed by the methods of sample survey and regression analyses. Most of the data used in this study were compiled from water consumption records obtained from the Board of Water Supply.
During the period of 1960-1971, the average daily per capita water consumption increased by about 27 percent from 139 gal to 177 gal. When per capita consumption was estimated by nine service areas per capita consumption figures depicted not only a wide dispersion in absolute value but also revealed different rates of growth. The seasonal patterns of water consumption were examined on a monthly basis. There is a steadily widening seasonal fluctuation in water use over time with summer consumption increasing faster than that for winter use. The trend of sprinkling demand was estimated from maximum and minimum day water consumption’s trend equations. There is a difference in per capita consumption’s between single and multiple family dwellings, which is attributable mainly to outdoor sprinkling by households occupying single family dwellings.
The water consumption’s level in established residential areas has remained essentially constant over time. The overall increase in per capita consumption results from water use for other than indoor domestic purposes. Water consumption’s has been expanding most noticeably where there is significant construction activity. Per capita water consumption’s data were fitted by linear regression to value of construction completed and annual changes in rainfall. The equation explained 96 percent of the total variation of per capita consumption’s and the two independent variables were statistically significant. There is no evidence that residential water users have been responsive to price changes in the past. Large industrial water users appear to respond to price increase but commercial users do not. Existence of price responsiveness in industrial demand seems to have a close relationship with alternative water supply sources and nonexistence of price responsiveness in commercial demand may be associated with an incidence structure of water bill payments, which also has an important meaning in measuring the price elasticity of residential demand.
The demand approach for projection of water use is advocated by most urban water studies. Major implications of this study are that: (1) the requirement approach is still a practical means of forecasting future water need., (2) there are serious institutional limitations in the use of price as a means to promote conservation but peak load pricing may be an effective way of reducing the inequitable distribution of water supply costs, and (3) the complex economic forces that have been operating through the existing institutional framework call for some form of unified management of groundwater resource for the purpose of conservation.