HOUSEHOLD WATER DEMAND MANAGEMENT MODELBY USING INPUT-OUTPUT TABLE WITH IMPACTS FROM PRICING POLICY
Pongsak SUTTINON, Nasu SEIGO
Kochi University of Technology
ABSTRACT: Household water demand prediction model was developed by using input-output table tocalculate effects from declared policy. The next important step is water demand and supply analysis withgovernmental scenarios and pricing policy to control higher water demand with limited water supply inLower Chao Phraya River Basin. Developed household water demand management model is a powerful toolfor policy makers to make decision which policy is suitable with each evaluation standard such as; 1)
maximum net benefit with higher price; 2) maximum user’s satisfaction with higher cost from investment
and subsidy; and 3) minimize raw water needed to support water demand. By this model, Policy makers canforecast household water demand with effect from changing economic structure and calculate the impacts
from declared governmental policy.
KEYWORDS: household water demand prediction model, Input-output table, pricing policy
1. INTRODUCTION

demand in this area, conflicts among each user inindustrial, service, household, and agricultural sector

Lower Chao Phraya River Basin (LCPRB) is one ofmay be the critical problem.

the important areas of development in economic andindustrial sector in Thailand. Half of Thai Gross

The result of household water demand (SUTTINON,Domestic Product or GDP was produced in this areaP., 2008) in year 2025 shows that; (1) For case of

because LCPRB is the central of economic,

medium total fertility rate with AIDS effect,

education, and political process. Not only highmigration, and constant water use unit per capita,economic activities grow in this area, but number

household water demand will be 1,112 million cubic

and density of population in this area increase also.

meter per year. (2) In case of varied water use unit,

An increase in demand from high density and growthwater demand will increase to 1,769 million cubic

rate of population in this area is likely to cause a risemeter because of higher unit of water use from betterin need of infrastructure especially water indaily life style in urban area. This water has to behousehold water use.

supported by governmental agencies with constraintsof water supply in this area.

From the limitation of water supply and water
protected measure such as groundwater pumpage

From the difficulty of water supply scheme in recent

closing policy, water shortage may be the main

year, saving water was been considering more thanproblem to obstruct development of economic

developing new water sources. Water demand

activities in this area and Thailand also. If the policy

management is an appropriate toolbox for improving

makers cannot control the rapidly increasing water

efficiency and sustainable use of water with

Secondly, water demand and supply in each source

considering economic, social and environment

with price, constraint of quantity, and quality were
1.1 Objectives

collected by primary data, and secondary data. These

The objectives of this paper are shown as follow; 1)

data are important to generate water demand-supply

to analyze water demand-supply curve fromcurve in the next step.

secondarydataofgovernment

agenciesandquestionnaire survey including constraints of each

Thirdly, integrated water management model in casewater source in each province; 2) To developof governmental options was analyzed by using

integrated water management model including

outputs from water demand and supply models.

government option scenarios; with/without leakage

There are 2 main topics for scenarios as follow; (1)reduction system, and case of with/without subsidy

with/withoutfrom governmental side to select the optimum

with/without subsidy from governmental agencies.

scenario for policy maker to make decision with

The net benefits of each scenario can be calculated

water demand management system by using

by using this water demand management model.

equilibrium analysis, pricing policy, and cost-benefit

Policy makers can choose the suitable strategy byanalysis.

each evaluation standard.

leakagereductionsystem,(2)Finally, after assessment of possible demand andStudy area
The study area is located in Lower Chao Phraya

supply, strategic decision making model was appliedRiver Basin. There are 7 provinces in this area;

to analyze whether and how the new water

Ayutthaya, Bangkok, Nakon Pathom, Nontaburi,

infrastructure should be invested to support the water

Pathum Thani, Samut Prakan, and Samut Sakhon.

demand with uncertainty of water demand in theBangkok is the capital of Thailand and the mainfuture. In this paper, step 2 and 3 were concentrated

water user in this study area.

to calculate the suitable choice with constraints inthis study area.

2. METHODOLOGY
2.1 Water demand model
The model mechanism of household water demand

Water demand in each scenario case was forecasted

management model developed is shown in figure 1.

byThe model was divided into four parts; water

SUTTINON, P as shown in figure 2. (SUTTINON,demand, water supply, integrated water management

P., 2008)

model,andStrategicdecision

makinghouseholdwaterdemanddevelopedbywithuncertainly for infrastructure development..

2.2 Water supply model
Water supply in each source with price, constraint ofFirstly, householdwaterdemandmodel

wasquantity, and quality were collected by secondary

developed in Lower Chao Phraya River Basin,data(annualreportandThailand. There are two main part in this model; (1)government

Population model, and (2) Water use unit model.

(questionnaire survey of Kochi University ofPopulation model by age, sex, and 76 provinces wasTechnology). These data are important to generate

developed by using Cohort-component method.

water demand-supply curve in the next step.

agencies),

masterandplan

fromprimarydata

Water demand modeling

Water supply modelingwater supply analysis

Water use unit analysis
ThailandIO table model- New water infrastructure plan
Water use unit model

Economic analysis

Provincial household water
demand model

Population model- Constraint in each water sources(GW, PW, SW, etc.)- price- quantity- quality- Level of life style and main activities

Strategic Decision Making- Valuing flexibility in water demand & supply management

government option
Without leakage reduction
systemgovernment
consideration

With leakage reduction
systempaid by water users

susidy by government

Impact to citizen and society

Integrated water management modeling

Figure 1. Model mechanism.

(a) Study area scale(b) Provincial scale in year 2025

Figure 2. Household water demand in case of varied water demand.

Supply curve was analyzed from master plan andFrom

thegroundwaterbanlaw,now,

thereport of Waterworks Authority. There are three

Metropolitan Waterworks Authority (MWA) has two

sources in this area; groundwater (GW), surface

sources of raw water to produce pipe water. The firstwater (SW), and pipe water (PW). Groundwater was

is free water from Chao Phraya River with pumping

limited by groundwater law to protect land

capacity of 5.8 Mm3/d. The second one is new watersubsidence. The yield point of GW in this study areawith average price 0.30 THB/ m3 from Mae Klong

is 1.25 Mm3/d but 0.00 Mm3/d for raw waterand Tha Chin River located outside service area of

produced to household sector. From the problem of

MWA with capacity 1.3 Mm3/d. With limitation ofquality of water or unsafe water in lower Chao

water supply, water leakage reduction system may be

Phraya River, the model was developed under

one of the interesting options of water demand side

assumption that water source for household in themanagement, however, the unit cost of water with

future is mainly pipe water.

this system is very high if compare with cost of raw
water. From that reason, policy maker needs to know

2.3 Integrated water management model

what price of paid raw water is suitable to construct

Integrated water management model in case ofwater reduction system.

governmental options was analyzed by using outputs
from water demand and supply models. Four

Finally, the net benefits of each scenario can bescenarios generated in this step were shown in Table

calculated by using this water demand management

1; (1) ‘Inf-NoLeak-NoSub’ is case of providing newmodel. Policy makers can choose the suitablepipe water (Inf) without leakage reduction systemstrategy by each evaluation standard.

(NoLeak) and without subsidy (NoSub) fromgovernmental agencies, (2) ‘NoInf-Leak-NoSub’ is

3. RESULTS

case of with leakage reduction system from 30 % totarget of 10 % of leakage rate (Leak) and without
subsidy, (3) ‘NoInf-Leak-Sub’ is case of with

3.1 Water supply model and integrated householdwater management modelleakage reduction system and subsidy, and (4)Figure 3 shows how household water demand and‘NoInf-Leak-Sub*’ is as same conditions as case 3

supply curve can simulate with four governmental

but the objective of case 4 is to find the price of raw

options’ scenarios. The water demand for selectedwater which is bought from Royal Irrigation

economic and population scenario in 2025 by using

Department (RID) that leakage reduction system will

water demand model is 1,769 MCM/year or 4.85

be effective.

Mm3/d as shown in dash line. Demand curve named
D in base year was generated by data from

Table 1. Scenarios of governmental options’ andpricing policy.

government agencies with analyzed data fromquestionnaire (SUTTINON, P., 2007). DemandScenario

12

3

4

curves in the future were transformed to target

InfWithWithout

Without

Without

demand form model as shown in line named D’ andLeak

WithoutWithWithWithD’’. The main assumption of this step is water

SubWithoutWithoutWithWith

shortage for household sector is unacceptable. It

Note: Inf is new water supply system,
Leak is leakage reduction system, sub is subsidy.

means that household sector was guaranteed bygovernment to have enough water use.

Case 1: Inf-NoLeak-NoSub

Case 2: NoInf-Leak-NoSub

Case 3: NoInf-Leak-Sub

Case 4: NoInf-Leak-Sub*

Figure 3. Household water demand and supply curve in each scenario.

Water supply curve in case 1 was generated fromTHB/m3 with only 4.73 Mm3/d of water demand that

constraints of groundwater and pipe water. Theis lower than needed water in case of without

upper limit of GW is 0 Mm3/d for household sector

subsidy. It means that users have to reduce water use

from the groundwater ban law. The second step isand comfortable life because of higher price;

PW1 or the pipe water that was produce from Chao

however, if government side subsidizes higher unit

Phraya River. The third period is PW2 with higher

cost from leakage reduction system for user, users

price from paid raw water to RID for other rivers.

can get the same satisfaction as case 1 but can save

The equilibrium points in case 1 is EP1’; demand at

raw water from leakage reduction system.

4.85 Mm3/d with price of 10.33 THB/m3.
Case 4 have same mechanism as case 3 but the priceIn case 2 or case of with leakage reduction system,of raw water bought from RID is different. The case

supply curve was shifted higher with additional unit

4 was generated to calculate what price of bought

construction,

raw water that water leakage system should be

operation, andmaintenancecost3

approximately 2.47 THB/m in period PW3. Theinvested.

equilibrium points name EP1 was shifted to EP2’ atprice of 12.7 THB/m3 with 4.85 Mm3/d of demand. ItTable 2 shows the results of household watermeans that users have to pay higher cost for the same

demand management model in case of governmental

amount of water in case 1. The satisfaction of users

options’ scenarios by benefit-cost analysis. Thein this case is lower than case 1 because they pay

benefit was calculated from four topics; (1) water

higher price for the same quantity of water.

sale, (2) consumer surplus, (3) producer surplus, and(4) free water of leakage reduction from 30 % toIn case 3, users actually pay for water at 12.7

10 % of leakage rate. Total costs were analyzed from

two topics. The first is subsidy cost and the second isThis standard is concentrated to choose theunit cost of construction, operation and maintenance.

governmental option that produce maximum net
benefit or maximum of (benefit – cost). Table 5.9

3.2 Evaluation standard

shows that maximum net benefit is case 1 and 4 with

As same as industrial sector, there is a question for

total benefit of 290.90*106 THB/d. In case 1, it

policysuitablemeans that policy maker should construct only thegovernmental options to declare and use. There arewater supply system without leakage reduction

many ways to choose the suitable option withsystem and subsidy. The reason is that unit water

constraints in this area. Evaluation standards are theprice of leakage system is more highly expensive

tools for government to make a decision. However,than unit price bought from RID. The advantage ofthe most important assumption in this household

this case is the citizen can use more water as theyevaluation is that there is no shortage for this sector

need with the cheap price; however, the disadvantage

because water for people is the first priority. It meansis the difficulty of finding new raw water sources.

makershowtoselectthethat basic water infrastructures have to construct to2.

support higher water demand. In this topic, there are

From the previous standard, it is possible that the3 evaluation standards used in this study as follow;
1. To maximize net benefit:
Table 2

To maximize user’s satisfaction:

maximum benefit’s choice in case 4 will have aproblem of user’s dissatisfaction.

Cost-benefits analysis, impacts from governmental options’ scenarios and pricing policy.
Case 1.

Case 2.

Case 3.

Case 4.

Inf-NoLeak

NoInf-Leak

NoInf-Leak

NoInf-Leak-Nosub-Nosub-Sub-Sub *

Mm3/d

4.85

4.85

4.85

4.85

3

THB/m

10.33

12.70

12.70

14.10

3

10.33

12.70

10.33

10.33

Leakage reduction system

Without

With

WithWith

Subsidy

Without

Without

WithWith

Unit

Water use
Price at equilibrium point
Price paid by user

THB/mBenefit-

Water sale

106 THB/d49.18

49.77

49.18

49.40

-

Consumer surplus

106 THB/d240.80

229.44240.80238.02

6-

Producer surplus

10 THB/d0.92

11.82

0.92

4.32

-

Free water from leakage

106 THB/d0.00

0.04

0.08

0.35

10 THB/d290.90

291.08290.98292.09Total benefit

6Cost
-

Construction cost

106 THB/d0.00

0.32

0.59

0.59

-

Subsidy cost

106 THB/d0.00

0.00

0.59

0.59

6Total cost

10 THB/d0.00

0.32

1.19

1.19

Net benefit

106 THB/d290.90

290.76289.79

290.90Note: 1. * for case 4, the net benefit will equal to case 1 if the price of raw water bought form RID is higher than 1.41 THB/m3
2. 36.3 Thai Baht (THB) = 1 U.S. Dollar (USD) at Dec 22, 2006.

This standard will concentrate in maximizing(high. Medium, and low), two cases of deaths (withuser’s satisfaction. Case 1 and 3 are the suitable

and without effects from AIDS), and migration

choices for this standard with maximum net benefit.

fromThe reason that leakage reduction system is not

Input-output table were applied in this model. Water

effective is because the unit cost of raw water is

use unit in the future was analyzed from3changing

economicstructure

fromvery cheap approximately 0.30 THB/m (averagequestionnaire survey and impacts from changing

cost of raw water in all rivers) compared with unit

economic structure from Input-output table. Water

cost of leakage reduction system at 2.37 THB/cu.m.

supply was simulated with constraints of new3.

To minimize raw water needed to support

supply systems and constraint of price and quantity
in each water source. The governmental option andwater demand:
By this standard, case 3 and 4 is suitable choice.
3

impacts from declared policy were calculated by

Needed raw water in case 3 and 4 is only 4.6 Mm /dusing cost-benefit analysis with data of analyzed

to produce pipe water or can save raw water morewater demand and supply. The suitable government

3

than case 1 approximately 0.25 Mm /d, however,

option is considered with evaluation standard.

the maximum spared capacity is 1.22 Mm3/d.
5. RECOMMENDATIONAs can be seem in Table 2, in the viewpoint ofcentral government, if the evaluation standard is

The next interesting topic is whether water

maximum net benefit, case 1 and 4 are the suitableinfrastructure should be invested under uncertainty

because of the highest net benefit. However, theof household water demand growth rate in theconsumer surplus or user’s satisfaction in case 4 isfuture. Policy makers have to make a decision tolower than case 3’s benefit. It means that if user canconstruct for the water demand in the next 20 years.

choose, case 4 is the second choice. It may be

If the water demand growth is low in the future,affected to society’s problem. Policy makers should

policy maker should stop water supply project andcarefully make a decision with this option undermonitor the water trend in the future. In this case,suitable evaluation standard. The net benefit in casethe risk of loss of construction, operation, and

4 is as same as case1 with the raw water pricemaintenance

3

cost

wasstronglyconsidered.

bought from RID at 1.41 THB/m or 4.7 times ofHowever, if high water demand will occur, the newprice in present. It means that leakage reduction

water infrastructure should be constructed tosystem should be effective with this unit raw watersupport higher water demand. In this case, the riskcost.

of loss of damage from water shortage will bemainly considered.

4. CONCLUSION
The second topic is how to simulate agricultural
Proposed household water demand management

sector into the model and how these activities

model can predict household water demand bychange by declared policy. How to manage theusing population model from Cohort-component

water share of each user and activity with themodel and water use unit from analyzed data fromchanging

questionnaire survey of Kochi University ofpolicy?

Technology in 2006. Three case of total fertility rateeconomics

structure

fromdeclared

REFERENCES
P. SUTTINON., 2008. Water Demand Management
Model in Lower Chao Phraya River Basin,Thailand, PhD Dissertation, Kochi University ofTechnology, Kochi, Japan.
P. SUTTINON and N. SEIGO, 2008.

Household

Water Demand Prediction Model with Changing
Economic Effects by Using Input-Output Table
Model., The XIIIth World Water Congress.,
September 1-4, 2008, France. (Accepted)
P. SUTTINON and N. SEIGO, 2007. Estimationof Industrial and Household Water Use byusing Input-Output Table and Questionnaire
Survey in Lower Chao Phraya River Basin,Thailand., The Symposium on EarthEnvironment of Japan Society of Civil
Engineering , August 2-3, 2007, Kochi, Japan.