Elasticity of Demand for Water Resource Managers

Demand management policies for water systems should be based on knowledge of economic behavior of the water customers. Some aspects of this economic behavior can be quantified using the concept of elasticity. Relatively simple calculations can guide the water system management in solving questions of equity and efficiency in water production and distribution. While the concept of elasticity can be applied to an almost endless number of topics, this chapter discusses the utilization and calculation of price elasticity of demand, cross price elasticity of demand, and income elasticity of demand for water.