Commercial and Industrial Water Demands

This chapter examines the structure of commercial and industrial water demands. It begins with a brief theoretical treatment of production theory. This section is used to learn what direction is provided by economic theory for the construction of input demand models, to identify the variables that can be expected to influence firms′ water demands, and to clarify the types of data needed to estimate the structure of firms′ water demands econometrically. The chapter then discusses the estimation of commercial and industrial water demands and reports on what is known regarding price and output elasticities. While this chapter has the same basic structure and coverage as the preceding one, there are some topics that are specific to industrial water demands. In particular, this chapter considers the definition of the price of water when firms are self-supplied, the use of programming models to represent industrial water demands and the role of water recycling.