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Short-Term Forecasting Analysis for Municipal Water Demand

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  • Fullerton, Thomas M., Jr.
  • Ceballos, Alejandro
  • Walke, Adam G.

Abstract

Short-term water demand forecasts inform decisions regarding budgeting, rate design, water supply system operations, and effective implementation of conservation policies. This study develops a Linear Transfer Function (LTF) forecasting model for El Paso, Texas, a growing city located in the desert Southwest region of the United States. The model is used to generate monthly-frequency out-of-sample simulations of water demand for periods when actual demand is known. To measure the accuracy of the LTF projections against viable alternatives, a set of benchmark forecasts is also developed. Both descriptive accuracy metrics and formal statistical tests are used to analyze predictive performance. The LTF model outperforms the alternatives in predicting demand per customer but falls a little short in projecting growth in the customer base. Changes in climatic and economic conditions are found to impact consumption per customer more rapidly than changes in water rates.

Suggested Citation

  • Fullerton, Thomas M., Jr. & Ceballos, Alejandro & Walke, Adam G., 2015. "Short-Term Forecasting Analysis for Municipal Water Demand," MPRA Paper 78259, University Library of Munich, Germany, revised 04 Aug 2015.
    • Handle: RePEc:pra:mprapa:78259
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    Cited by:

    1. Adam G. Walke & Thomas M. Fullerton Jr., 2019. "Metropolitan Hotel Sector Forecast Accuracy in El Paso," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 47(2), pages 179-191, June.

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    More about this item

    Keywords

    Water demand models; water conservation; forecast accuracy;
    All these keywords.

    JEL classification:

    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods

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