ABSTRACT
Among the variety of municipal uses of water, residential (also called household or domestic) use dominates, with commercial and public also parts of the mix. Like the producers’ good uses, municipal water use is also a private good; one person’s use conflicts with the potential benefits derived by others. Residential water use includes indoor uses for sanitation, drinking, and cooking, and outdoor uses for lawns, gardens, and occasional washing of cars and driveways. In arid areas, outside uses may account for a major portion of demand, so climatic factors are important in the demand model. Residential use is appropriately classified as a final consumption good, in contrast with the intermediate or producers’ goods (agricultural, industrial) uses of water discussed in the previous two chapters. Commercial water uses, mainly nonmanufacturing business enterprises including restaurants, hotels, retail and wholesale trades, and offices, have received limited separate treatment from economists, but are also briefly mentioned in this chapter. The commercial category does not fit conveniently into our classification system, because although commercial water use is technically a producers’ good, the category represents uses in which water is primarily for human consumption and sanitation on the premises. Government (or public) water uses include government agencies, schools, and other public services, including irrigation and care of public parks and recreational facilities. Because government uses are so varied and water sales to government entities are not often volumetrically priced, this class of use is seldom subjected to economic demand analysis. This class of demand is not separately discussed here.
