Understanding water consumption trends across income groups before, during and after the 2015-2018 Cape Town drought

Dunn, Micaela Ann

Understanding water consumption trends across income groups before, during and after the 2015-2018 Cape Town drought

Thesis / Dissertation

2026

Publisher

University of Cape Town

Department

School of Economics

Faculty

Faculty of Commerce

Abstract

This paper examines trends in household water consumption before, during and after the 2015–2018 Cape Town drought across different income groups. Using panel regression methods, the study investigates whether water consumption rebounded to pre-drought levels following the crisis and explores the key factors shaping consumption behaviour under conditions of scarcity and recovery. The empirical approach combines descriptive analysis with a static correlated random-effects model for the pre-drought period and dynamic fixed-effects models with lagged consumption for the drought and post-drought periods. Drawing on insights from the behavioural and environmental economics literature, the quantitative results are interpreted within a broader framework of habit formation and behavioural adjustment. Overall, the findings indicate that water consumption does not fully return to pre-drought levels across income groups. Income (proxied by quintile property value), seasonality, precipitation, temperature and past consumption behaviour are all found to significantly influence water use before, during and after the drought.

Keywords

water

drought

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