The Drivers of Non-Revenue Water : How Effective are Non-Revenue Water Reduction Programs?
To many, reducing water losses is seen as key to more sustainable water management. The arguments to reduce water losses are compelling, but reducing water losses has turned out to be challenging. This paper applies a panel data analysis with fixed...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank Group, Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2014/08/19913981/drivers-non-revenue-water-effective-non-revenue-water-reduction-programs http://hdl.handle.net/10986/19396 |
| Summary: | To many, reducing water losses is seen
as key to more sustainable water management. The arguments
to reduce water losses are compelling, but reducing water
losses has turned out to be challenging. This paper applies
a panel data analysis with fixed effects to determine the
major drivers of non-revenue water, which is define as the
volume of water losses per kilometer of network per day. The
analysis uses data from the International Benchmarking
Network for Water and Sanitation Utilities, covering
utilities in 68 countries between 2006 and 2011. The
analysis finds that non-revenue water is driven by many
factors. Some of the most important drivers are beyond the
control of the utility, such as population density per
kilometer of network, the type of distribution network, and
the length of the network, which are largely the result of
urbanization and settlement patterns in the localities that
the utility serves. The opportunity costs of water losses
are also key in explaining what drives non-revenue water.
The paper finds that very low opportunity costs of water
losses have an adverse effect on the reduction of
non-revenue water. Country fixed effects turn out to be
important, meaning that the environment in which the utility
operates has an important impact on non-revenue water
levels. An important conclusion is that the design of
non-revenue water reduction programs should study the main
drivers of non-revenue water to provide utility managers
with a better understanding of what can be achieved in terms
of non-revenue water reduction and whether the benefits of
these reductions exceed their costs. |
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