McGrane, ScottAlhazmi, Raghad2023-07-262023-07-262023-03-15https://hdl.handle.net/20.500.14154/68718Demand for water has escalated at an exceptional rate lately while water resources are continuously depleting due to various social and environmental factors. In this regards, the present research paper assesses the long run effect and causal relationship of 2 economic indicators on demand for water in China. The macro variables understudy are water prices and households’ level of income. A monthly based vast data set was employed commencing from January 2001 until April 2021 on which Augmented Dickey Fuller unit root test, Engel Granger co-integration test, & Granger causality test were applied. Results revealed a strong causal relationship and a significant long run influence water prices on demand for water while household income level formed a minimal negative co-integration in the long run. On the contrary, granger causality test revealed no causal link between income levels and consumption of residential water. The findings of this study are fundamental to government and policy makers as it will help them to comprehend the relationship of income levels & price of water with water consumption. It will increase awareness amongst relevant authorities on how they can exploit these 2 economic factors to enhance water services in their countries and manage water stress.47enEconomicsWater resourcesDemand of waterChinaPrice of waterIncome levelsThesis