The Analysis of Elimination of Subsidy on Residential Water Demand Case study: The City of Tehran

Abstract

In this study, in order to analysis the effects of subsidy on residential water demand, the long- term residential water function for the city of Tehran is estimated. All data are in the form of quarterly time series for the period covering the Iranian years 1379 to 1387. Independent variables include average water price, average household expenditure, consumer price index, total water price, subsidy, average rainfall and average temperature. The results denote that the decrease or elimination of water subsidy decreases the water demand in household section. Moreover, among all variables which affect water demand, subsidy has proportionately a greater effect on water consumption. Minimum households’ water consumption in Tehran is 170 liters per day and the greatest excess in residential water consumption takes place in summers and autumns