Residential Water Demand in the Northwest of Spain

A panel of monthly aggregate data from the Northwest of Spain is used to estimate domestic water demand functions under linear and non-linear tariffs. Price, billing, climatic, and sociodemographic variables are used as explanatory variables. The use of intraannual data constitutes a relevant contribution in the European context. Overall marginal price elasticity estimates lie between –0.12 and –0.17. Summer-only elasticities and elasticities associated with uses beyond the effectively free allowances seem significantly higher. Climatic variables significantly affect monthly use, although probably less than in other wealthier and drier areas. Domestic water use appears to be a normal good.