Urban Water Use

Willamette River Basin residents and businesses alike depend on a sustainable source of clean water for continued well being and livelihood. To anticipate future urban water demands, the WW2100 economics team developed a modeling component for Willamette Envision that projects residential and nonresidential urban water demand as a function of factors such as water price, income, population, and population density. Demand for each urban area is modeled in aggregate, with models based on empirical economic research studies and data from major urban areas in the basin. As Willamette Envision runs, the estimated water demand is met by diversions of water from surface and groundwater sources, consistent with existing municipal water rights. WW2100 water demand modeling suggest an increase in urban water use within the basin over the century, mainly due to population growth. The projections indicate that per capita consumption, which has been declining for the past 20 years because of price increases and a range of urban water conservation programs, will stabilize at between 80 and 100 gallons per day, before rising gradually due to growth in per capita income.



Urban Water Use Modeling in Brief

Water in urban areas of the Willamette Basin is put to residential, commercial, and industrial uses. The amount used will depend on a range of factors including population, price, and income, as well as urban population density. This web page provides a brief introduction to urban water demand modeling in Willamette Envision; for a more detailed description, refer to Jaeger et al., 2016.

The urban water demand component of Willamette Envision consists of models of residential and nonresidential urban water demand for the Portland Metropolitan Area, Salem, Corvallis, and Eugene/Springfield, as well as a separate model for smaller urban areas. We selected model variables based on a review of the economics literature on urban water demand and on the need to use variables that could be forecasted over the entire study period as exogenous drivers (income and population growth) or as variables generated within the Willamette Envision framework (population density). The economics literature suggests that a water demand function must include marginal price of water, pricing structure, and income (Olmstead et al., 2007; Olmstead, 2009; Olmstead, 2010; Bell & Griffin, 2011; Mansur & Olmstead, 2012). Given the specific forecasting needs of the urban water component for WW2100, we also included population and population density in the model. We collected the most current information available (at the time the project was begun) on each of these variables for Portland, Salem, Corvallis, Eugene, and Springfield. We used coefficients from the literature and the averages of water quantity, price, income, population, and density for the five cities to calibrate a log-linear model and calculate the intercept term corresponding to the baseline averages. Finally, we adjusted the demand models to reflect seasonal variations in demand. Our baseline scenario, called the Reference Case (1) assumes initial prices that are commensurate with the basin’s major cities in 2010, (2) includes price increases comparable to what occurred on average from 2010-2015, and (3) assumes a 1.5% annual increase from 2016-2025 (in real, inflation-adjusted dollars), in recognition of the existing backlog of infrastructure needs and system maintenance and upgrades expected for western Oregon. After the year 2025, the Reference Case assumes prices remain constant in inflation-adjusted terms for a given size city. For more information about urban demand modeling in Willamette Envision refer to Jaeger et al. (2016).

Additional Modeling Details:

  • Many Willamette Basin metropolitan areas have multiple water providers that divert water from multiple sources. Many water providers also buy and sell water between municipalities. Willamette Envision does not model these complex arrangements and instead models water demand for each metro area in aggregate. We used water-use reports from recent years to apportion urban water demand among water rights that have been used most by each metro area. As demand grows, the model allows for additional water to be made available by diverting water from the Willamette mainstem.

  • Water supply for the Portland Metro area also includes water sources that are outside of the Willamette Basin including Bull Run (the major source for the city of Portland) and Barney and Scoggins Reservoirs (that serves Metro area customers in the Tualatin River Basin). In the case of Bull Run, we have restricted our model so that no more than two-thirds of total Portland Metro water demand comes from this dominant water right (based on recent water use data). However, the Bull Run water right has a maximum legal rate of 636 cfs, which is 50% above the highest rate of withdrawal in the reference run model (in 2100) with this restriction in place. In addition, our model does not include the mid-Willamette water supply source currently under development by the Tualatin Valley Water District. That source, to be completed in 2026, will have a capacity of 100 million gallons per day, or more than 36,000 acre-feet during the four peak summer months.

  • We adjust residential demand for seasonality by decomposing daily water use into outdoor and indoor use components, based on 24 years of daily data from Portland Water Bureau. Total predicted yearly water demand from above is divided by 365 to obtain daily use, and then multiplied by indoor and outdoor fractions to reflect seasonality. Water demands in rural residential zones, relying on groundwater, is also included in our model. It is predicted using the cost of pumping as a measure of the price of water, the population of the rural-residential area, income per household, and population density.

Select Findings from Urban Water Demand Analysis

Water Demand

  • The demand model produces an estimate of the total annual urban water demand of about 330,000 ccf/day (272 million gallons) in 2015, or 305,000 acre-feet per year. Model projections show these levels rising in coming decades for the entire basin, and especially for the Portland Metro Area, mainly due to population growth (Fig. 1).

  • Consumption per capita will stabilize at between 80 and 100 gallons per person per day, before rising gradually due to growth in per capita income (Fig. 2).

  • If urban water prices throughout the basin were 25% higher than in our Reference Case scenario, urban water demand would be 12% lower. For a 50% price hike, or a 75% price increase, the reductions in urban water demand would be 25% and 37%, respectively (Fig. 3). With these price increases, water consumption in the Portland Metro area would be expected to decline to about 70, 62, and 55 gallons per person per day, respectively.

  • In an alternative scenario with higher population growth than in the Reference Case scenario (called HighPop), urban water demand increases by almost 20% by 2030, 36% by 2060, and almost 50% by the end of the century relative to baseline projections.

  • In an alternative scenario in which income is assumed to remain constant (called NoIncGrowth), basinwide urban water demand is 3.7% lower than in the Reference Case scenario by 2030, 9% lower by 2060, and almost 14% lower by the end of the century.

  • We also considered a scenario in which both income and population are kept constant (called NoGrow). Compared to the Reference Case scenario, basinwide urban water demand is 24% lower by 2030, 44% lower by 2060, and almost 59% lower by the end of the century.

Projected basinwide water demand.

Figure 1. Projected basinwide water demand.


Projected per capita water demand.

Figure 2. Projected per capita water demand.


Projected basinwide water use for different price paths.

Figure 3. Projected basinwide water demand for different price paths.

Metro water use per capita, with additional price increases.

Figure 4. Projected per capita water demand for Metro under different price paths.


Expenditures on Water

  • Expenditures on water represent a small share (less than 0.5%) of household income, and this share is projected to decrease over time (Fig. 4). For low-income households, however, the cost of water will represent a more significant share of income.

  • Price increases of 25% to 75% have little effect on expenditures as a share of income because the rise in price will have an offsetting effect on consumption, resulting in a small effect on total expenditures (Fig. 5).

Expenditures on water as a share of income.

Figure 5. Expenditures on water as a share of income.


Expenditures on water as a share of income for different price increases over the Reference scenario.

Figure 6. Expenditures on water as a share of income for different price increases over the Reference Case scenario.

Net Change in Irrigation with Urban Expansion

As cities in the basin grow, they will to some extent displace agriculture as they expand, and this will include displacing some irrigated lands. Hence, reduced irrigation could occur as a result of urban expansion and displacement of these irrigated areas.

  • Our model predicts an increase in urban water use (summer outdoor) of 36,800 acre-feet for the six largest metropolitan areas in the basin.

  • Due to the land-use changes accompanying growth, displacement of irrigated farmland offsets forty percent of this increase. The net increase is estimated to be 21,400 acre-feet.

  • These effects vary significantly across cities in the basin, depending on the extent and direction of urban expansion, as well as on the proximity of the city boundaries to surface irrigated farmlands.



Urban water use will increase significantly due to growth in population and rising income per household. Price increases in recent years, and those that are anticipated in the coming decade, will curb urban water demand to a significant degree. However, because a large portion of urban water in the basin comes from outside sources (primarily the Bull Run watershed), and because most water is used indoors and returns to the surface water sources from where it originated, the urban consumptive use of in-basin surface water is a small fraction (only 7%) of total urban water use.

Notes, Related Publications & Links

  • Jaeger W.K, Plantinga A.J., Langpap C., Bigelow DP, Moore KM.  2017.  Water, Economics, and Climate Change in the Willamette Basin, Oregon. OSU Extension Service Publication EM 9157.

  • Note: Our projections for both urban and agricultural water use are based on the set of behavioral economic models described here and elsewhere. These models reflect and are derived from economic theory; they are spatially and temporally explicit, and take into account many factors, including the following: water price, household income, population, population density, water delivery costs, land values and farm profits, land use change, crop choice, planting date, water availability across space and time, shifts in seasonality of crop growth due to climate change, daily determination of crop evapotranspiration, urban displacement of farmlands, and utilization rates for irrigation water rights. The 2015 Statewide Long-Term Water Demand Forecast Report, prepared by the consulting firm MWH for Oregon’s Water Resources Department, also makes estimates of future water demand in Oregon. Their methodologies differs from ours in several ways. In the case of agriculture, the MWH report draws on USGS estimates (which in turn are based on USDA Census of Agriculture data) for irrigated acres by county and by crop. Irrigation water demand is then estimated based on Net Irrigation Water Requirements, which are then adjusted to reflect the effects of climate change. In the case of urban water demand forecasting, MWH relied on existing Water Management and Conservation Plans (WMCP) developed by various city governments, and these were then adjusted in proportion to estimated population growth. Changes in per capita demand were estimated by MWH from 50 of the most recent WMCPs from communities across Oregon.

Contributors to WW2100 Urban Water Use Modeling

  • Christian Langpap, OSU Applied Economics (lead)

  • William Jaeger, OSU Applied Economics

  • David Conklin, Oregon Freshwater Simulations


Bell, D. R., & Griffin, R. C. (2011). Urban water demand with periodic error correction. Land Economics, 87(3), 528-544.

Jaeger et. al. (2016). Scarcity amid abundance: Water, climate change, and the policy role of regional system models. Manuscript in preparation.

Mansur, E. T., & Olmstead, S. M. (2012). The value of scarce water: Measuring the inefficiency of municipal regulations. Journal of Urban Economics, 71(3), 332-346.

Olmstead, S. M. (2009). Reduced-form versus structural models of water demand under nonlinear prices. Journal of Business & Economic Statistics, 27(1), 84-94.

Olmstead, S. M. (2010). The economics of managing scarce water resources. Review of Environmental Economics and Policy, 4(2), 179-198.

Olmstead, S. M., Hanemann, W. M., & Stavins, R. N. (2007). Water demand under alternative price structures. Journal of Environmental Economics and Management, 54(2), 181-198.


Web page authors: C. Langpap, W. Jaeger
Last updated: September 2016