Exploring effects of water price on residential water demand in Korea

Abstract

Management of water resource is pivotal issue globally, while it is getting difficult due to climate change. The purpose of this study is to explore water resource management in terms of demand and suggest efficient residential water demand management in Korea with price elasticity. This study applied data of water usage and water price of 15 regions in four major river basins by considering up and downstream locations from 1997 to 2017. This study applied regression analyses and ANOVA to verify claims. The results of this study found that there are relationships between water usage and price in Korea by revealing positive elasticity. The results also show that there are significant differences based on location and river basins. Findings provide important policy and management implications for the improvement of water resources management in terms of demand. The results of this study also provide signal for the water price that should be reconsidered by comparing water price level of OECD countries. Further the results implied that water management in Korea needs to be improved in terms of supply aspects to cope with climate change.