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      • Open Access Article

        1 - The Effect of Targeted Subsidy on Demand Rate of Urban Water in Qom City
        Farkhondeh jebel ameli Yazdan Goodarzi Farahani
        In this paper, the effect of subsidy on the long run urban water demand function has been examined in the city of Qom. To do this, the researchers have used monthly time series data during 2008:01-2011:06. The model estimated is based on the maximization of Stone - Gery More
        In this paper, the effect of subsidy on the long run urban water demand function has been examined in the city of Qom. To do this, the researchers have used monthly time series data during 2008:01-2011:06. The model estimated is based on the maximization of Stone - Gery utility function, autoregressive and co-integrated model approaches. The results indicate that the decrease or removal of water subsidy would decrease urban water demand. Also, Qom urban water demand has a negative relation to the price of water and other commodities and has a positive one to the revenue. All of these relationships are completely in line with economic theories. The province urban water demand is inelastic to water and other commodities prices and so a necessity for revenue. Also, the minimum level of water consumption of the households, when removing the price subsidy, is 38 liters per day. Manuscript profile