This study is concerned with measuring the cost of water supply and net revenue differences among customers by user class and location, and analyzing future water demand on the basis of plumbing permit application data. For water supply, a methodology based upon engineering principles was employed to collect data on distance, altitude, and costs of water delivery to sampled customers in a water utility service area. Estimates of cost elasticity were obtained. Altitude was not significant, but distance was found positively correlated with cost. In one location, at an extreme of the service area, this total cost elasticity became greater than one. Thus, cost economies for transmission of water exist, but are limited as indicated by this cost elasticity estimate. In addition, these costs were compared to the revenues collected from each customer sampled. The pattern of costs and computed net revenues were then examined through the use of computer mapping techniques. All this information becomes useful for examining water rates and system expansion. Also examined is the hypothesis that future water use can be predicted through the use of plumbing permit records.

"May 1978." "Contract no. R-803596-01." "Project Officer Robert M. Clark, Water Supply Research Division." "Department of Economics, University of Cincinnati." Includes bibliographical references.