Water Demand in the Chicago Metropolitan Area

Illinois faces a legally de ned quota for the amount of water that it is allowed to pump from Lake Michigan. Separately, in Northeastern Illinois, the ground water level has fallen due to pumping pressure. Together, these constraints on water supply could limit economic and population growth in the Chicago Metropolitan area. There are two alternatives to meet the area's growing demand: pumping water from distant sources, or using the available water more e ciently. The former will require huge investments in infrastructure, while the latter could postpone or circumvent those investments. In light of these facts, curbing water demand, rather than expanding water supply, seems like a promising option. The objective of study is to understand water demand in the Chicago area by examining the e ects of water price, weather conditions, and socio-demographic characteristics on water use in Chicago Metropolitan Area. Economic theory tells us that water demand should be responsive to water price. For policy makers, consumer responsiveness to water price changes will be invaluable information when considering long term strategies to ensure the e cient and conservative use of Chicago's water resource.unpublishednot peer reviewe