| Summary: | The relative scarcity of water resources has encouraged cities to create mechanisms to control water demand and avoid water stress. In the decision-making process, water companies need to assess the price influence on water demand predictions to design better policies. The aim of this study is to estimate the medium-term effectiveness of the implementation of a contingent tariff and its consequences for water demand elasticity to price. A novel model that requires only secondary data is proposed, that can be useful for guiding the drought planning process. The methodology consists of a framework that provides monthly predictions of water demand at the household level, considering price, seasonality, and previous water use. The results indicated that the contingent tariff promoted a reduction of 11–17% in water demand, but at a higher cost for low income households. Also, reduction in water demand was found to be inelastic to price increase. Using google search hits as a proxy for public interest, we found that water cost has a higher influence on users’ decision to save water than drought awareness.
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