Despite the large literature focused on residential water use, our knowledge of the impact of individual metering on household water consumption remains limited. Our work aims to fill this gap by providing the first estimate of the residential water demand function in the Principality of Andorra, where collective and individual metering coexists. Using a panel dataset covering the years 2006 to 2015, we propose estimating a domestic water demand function for the municipality of Andorra La Vella (the capital of Andorra). Our estimates reveal a price elasticity of the residential water demand equal to –0.7. Facing a price increase of 10 percent, households will react in the short run by reducing their water consumption by 7 percent. Interestingly, the price elasticity is found to be significantly different in single-family units compared to multi-family units. This may suggest a significant impact of individual metering on domestic water consumption in Andorra.
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