Research on Water Price and Quantity to Meet the Basic Living Needs of Urban Residents based on Water Conservation

Abstract

Abstract Water price is an economic approach to effectively promote urban residents to save water. However, due to the excessively large water volume and low water price of each step in the stepped water pricing model, the water-saving effect of urban residents is not obvious. Determining the first-step water price and water volume for urban residents has become an urgent issue to be solved both in theory and practice. Based on the basic water demand characteristics of urban residents, this study employs the extended linear expenditure system model (ELES) and quadratic approximate ideal demand function model (QUAIDS) to formulate an improved water demand-price function. The improved function model can describe the nonlinear relationship between urban residents' water demand and water price. Then, based on the questionnaire survey data of Zhengzhou City, combined with the improved QUAIDS model and the Ramsey pricing method, a system of equations is built to calculate the first-step water price and water volume that meet the basic living needs of urban residents. This method not only focuses on water conservation for urban residents but also considers their basic water needs and the water supply costs of enterprises. This study provides a theoretical basis and practical guidance for reforming urban water prices and promoting resource conservation in China.