Current Science

Open Access Open Access  Restricted Access Subscription Access

Estimation of Price and Income Elasticity of Water: A Case Study of Darjeeling Town, West Bengal, India


Affiliations
1 Department of Economics, Birla School of Social Sciences and Humanities, Birla Global University, Bhubaneswar 751 029, India
2 Department of Geography, University of Calcutta, Kolkata 700 073, India
3 FLAME University, Pune 412 115, India
 

This study examines the price and income elasticity of water of Darjeeling town in West Bengal, India. We collected the primary data between 2017 and 2018 through the survey method. Here simple random sampling has been used for interviewing 100 households. We divided the households into groups of 25 each according to the mode of consumption of water, such as domestic pipeline, commercial pipeline, domestic water tanker and commercial water tanker. This study concludes that the price for domestic pipeline connection, commercial pipeline, domestic water tanker and commercial water tanker is elastic by using the midpoint formulae of elasticity. More specifically, the consumption of water from commercial tankers and households that have commercial pipeline connection have relatively high elasticity as compared to households depending on domestic pipeline connection and domestic water tanker. Further, the result shows that the income elasticity of water demand is relatively high. Mainly, the income elasticity is less in households under domestic pipeline and domestic water tanker compared to those under commercial pipeline and commercial water tanker. The overall implication of the study is that rising water per litre price has compelled the residents to compromise on the quality of drinking water. Therefore, it is recommended that the government follows the objective of inter-generational equity for water in the long run.

Keywords

Pipeline Connection, Price and Income Elasticity, Simple Random Sampling, Water Demand, Water Tanker.
User
Notifications
Font Size

  • Josi, D., Feminist solidarity? Women, water, and politics in the Darjeeling Himalaya. Mt. Res. Dev., 2014, 34, 243–255.

  • Drew, G. and Rai, R. P., Water management in post-colonial Darjeeling: The promise and limits of decentralised resource provision. Asian Stud. Rev., 2016, 40, 321–339.

  • Tambe, S., Kharel, G., Arrawatia, M. L., Kulkarni, H., Mahamuni, K. and Ganeriwala, A., Reviving dying springs: climate change adaptation experiments from the Sikkim Himalaya. Mt. Res. Dev., 2012, 32, 62–72.

  • Department of Information Technology, Annual Report. Government of Sikkim, 2012.

  • Shashikumar, K. C., Practical steps needed for water resource management. Curr. Sci., 2005, 88, 1714–1715.

  • Howe, C. W. and Linaweaver, F. P., The impact of price on residential water demand and its relation to system design and price structure. Water Resour. Res., 1967, 3, 13–32.

  • Espey, M., Espey, J., and Shaw, W. D., Price elasticity of residential demand for water: a meta-analysis. Water Resour. Res., 1997, 33, 1369–1374.

  • Young, R. A., Price elasticity of demand for municipal water: A case study of Tucson, Arizona. Water Resour. Res, 1973, 9, 1068– 1072.

  • Conley, B. C., Price elasticity of the demand for water in Southern California. Ann. Reg. Sci., 1967, 1, 180–189.

  • Schoengold, K., Sunding, D. L. and Moreno, G., Price elasticity reconsidered: Panel estimation of an agricultural water demand function. Water Resour. Res., 2006, 42, W09411.

  • Thomas, J. F. and Syme, G. J., Estimating residential price elasticity of demand for water: A contingent valuation approach. Water Resour. Res., 1988, 24, 1847–1857.

  • Marzano, R., Rougé, C., Garrone, P., Grilli, L., Harou, J. J. and Pulido-Velazquez, M., Determinants of the price response to residential water tariffs: meta-analysis and beyond. Environ. Modell. Softw., 2018, 101, 236–248.

  • Metaxas, S. and Charalambous, E., Residential price elasticity of demand for water. Water Supply, 2005, 5, 183–188.

  • Dalhuisen, J. M., Florax, R. J. G. M., de Gischolar_main, H. L. F., and Nijkamp, P., Price and income elasticities of residential water demand: a meta-analysis. Land Econ., 2003, 79, 292–308.

  • Agthe, D. E. and Billings, R. B., Dynamic models of residential water demand. Water Resour. Res., 1980, 16, 476–480.

  • Nieswiadomy, M. L., Estimating urban residential water demand: Effects of price structure, conservation, and education. Water Resour. Res., 1992, 28, 609–615.

  • Shin, J.-S., Perception of price when price information is costly: evidence from residential electricity demand. Rev. Econ. Statist., 1985, 67, 591.

  • Camp, R. C., The Inelastic Demand for Residential Water: New Findings. J. Am. Water Works Assoc., 1978, 70, 453–458.

  • Dharmaratna, D. and Harris, E., Estimating residential water demand using the Stone–Geary functional form: the case of Sri Lanka. Water Resour. Manage., 2012, 26, 2283–2299.

  • Dhungel, R. and Fiedler, F., Price elasticity of water demand in a small college town: an inclusion of system dynamics approach for water demand forecast. Air, Soil Water Res., 2014, 7, ASWR.S15395.

  • Ghimire, M., Boyer, T. A., Chung, C. and Moss, J. Q., Estimation of residential water demand under uniform volumetric water pricing. J. Water Resour. Plann. Manage., 2016, 142, 04015054.

  • Hoyos, D. and Artabe, A., Regional differences in the price elasticity of residential water demand in Spain. Water Resour. Manage., 2017, 31, 847–865.

  • Hung, M.-F., Chie, B.-T. and Huang, T.-H., Residential water demand and water waste in Taiwan. Environ. Econ. Policy Stud., 2017, 19, 249–268.

  • Havranek, T., Irsova, Z., and Vlach, T., Measuring the income elasticity of water demand: the importance of publication and endogeneity biases. Land Econ., 2018, 94, 259–283.

  • Garrone, P., Grilli, L. and Marzano, R., Price elasticity of water demand considering scarcity and attitudes. Utilities Policy, 2019, 59, 100927.

  • Gross, E. and Elshiewy, O., Choice and quantity demand for improved and unimproved public water sources in rural areas: Evidence from Benin. J. Rural Stud., 2019, 69, 186–194.

  • Schleich, J. and Hillenbrand, T., Residential water demand responds asymmetrically to rising and falling prices. Appl. Econ., 2019, 51, 4973–4981.


Abstract Views: 384

PDF Views: 146




  • Estimation of Price and Income Elasticity of Water: A Case Study of Darjeeling Town, West Bengal, India

Abstract Views: 384  |  PDF Views: 146

Authors

Debi Prasad Bal
Department of Economics, Birla School of Social Sciences and Humanities, Birla Global University, Bhubaneswar 751 029, India
Ashish Chhetri
Department of Geography, University of Calcutta, Kolkata 700 073, India
Barun Kumar Thakur
FLAME University, Pune 412 115, India
Kanish Debnath
FLAME University, Pune 412 115, India

Abstract


This study examines the price and income elasticity of water of Darjeeling town in West Bengal, India. We collected the primary data between 2017 and 2018 through the survey method. Here simple random sampling has been used for interviewing 100 households. We divided the households into groups of 25 each according to the mode of consumption of water, such as domestic pipeline, commercial pipeline, domestic water tanker and commercial water tanker. This study concludes that the price for domestic pipeline connection, commercial pipeline, domestic water tanker and commercial water tanker is elastic by using the midpoint formulae of elasticity. More specifically, the consumption of water from commercial tankers and households that have commercial pipeline connection have relatively high elasticity as compared to households depending on domestic pipeline connection and domestic water tanker. Further, the result shows that the income elasticity of water demand is relatively high. Mainly, the income elasticity is less in households under domestic pipeline and domestic water tanker compared to those under commercial pipeline and commercial water tanker. The overall implication of the study is that rising water per litre price has compelled the residents to compromise on the quality of drinking water. Therefore, it is recommended that the government follows the objective of inter-generational equity for water in the long run.

Keywords


Pipeline Connection, Price and Income Elasticity, Simple Random Sampling, Water Demand, Water Tanker.

References





DOI: https://doi.org/10.18520/cs%2Fv120%2Fi5%2F800-808