9320926 Pint This research proposes to estimate water demand and price elasticities using residential billing data from Alameda County Water District in California over the period 1982 to 1992. The empirical part of the research will use data for 599 single-family households, as well as information on house size, lot size, household income, weather variables, and other socioeconomic variables from the 1980 and 1990 censuses. The demand equation also controls for variables that capture drought management policies used by the water agencies, such as publicity, distribution of water-saving devices, and use restrictions. Data on household water rate schedules, water use and other price measures are obtained from California water agencies that used price increases as a drought management policy. The project is important because it promises to produce reliable estimates of price elasticities of water demand that would assist water agency managers in all parts of the United states in assessing the effectiveness of price as a conservation device, the effects of relatively large price increases on household water use and water agency revenues, and the potential consumer surplus losses due to droughts. Moreover, the findings from this study would become increasingly valuable if global climate change caused larger or more frequent water shortages to occur in the United States. ***