Controlling households' drilling fever in France: An economic modeling approach

Using primary data collected at the national and local levels in France, this paper shows how water price increase, initially intended to generate environmental benefits through reducing water use, has produced economic incentives for households to drill their own garden boreholes. The paper first presents the results of a national survey which identifies the increasing number of garden boreholes as an issue of concern in a majority of the French counties. It then presents a microeconomic model which represents the households' decision to construct a borehole. The model is used to simulate the impact of various water pricing scenarios on tube well development and residential water demand at regional level. The paper ends with a discussion of the social impact of emerging independent supply strategies.