2025 Orange County Water Demand Projection Model
Table 3-2: Description of Demand Model Explanatory Variables
Expectations about
Log Transformed?
Explanatory Variable
Description
Coefficient Estimates
Departure from normal monthly maximum temperature (lagged values of temperature were also evaluated and included as explanatory variables as the influence of weather on water demand can persist for several months.) Departure from normal monthly precipitation (lagged values precipitation were also evaluated and included as explanatory variables as the influence of weather on water demand can persist for several months.)
Represents the difference from long-term temperature. Higher than
Yes
Positive Sign
normal temperatures are associated with increased demands.
Represents the difference from long-term precipitation. Higher than normal rainfall is associated with lower demands. Reflects the cyclical pattern in water use, where demands are generally higher in the summer and lower in the winter. Represented in the model as a sine / cosine pair of variables. (Most sectors have a single sine/cosine pair representing the seasonal cycle).
Yes
Negative sign
Larger magnitudes for agencies with greater seasonal peaking Negative sign with absolute value between 0 and 1
Seasonal index
No
Economic theory suggests negative correlation with demand.
Price
Yes
Water demand is positively correlated with economic fluctuations of the business cycle. The index is modeled as departures from long-term trends. The representation of jobs in many industries within a geographical area is related to the amount of water used within the CII sector. There is generally no expectations on the range of coefficient estimates. Housing density is negatively correlated with demand; on average, residences with more units per acre (or smaller parcel sizes) tend to use less water on outdoor uses.
GDP
Yes
Positive Sign
Mix of jobs across industries
Yes
N/A
Negative sign (commonly between 0 and - 1)
Housing density
Yes
3-6
Appendix G - 43
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