Role of Urban Water Pricing in Groundwater Depletion: Lessons from Covid-19 Outbreak in Tehran

In this study, we investigate the role of urban water consumption in Tehran on its groundwater level drawdown. To do so, besides classic price and income determinants, we add COVID-19 infection as another covariate of urban water consumption. Our results show that at least in short run, groundwater exploitation for urban drinking water could be also counted as a responsible contributor to water level drawdown in Tehran. Technically we find demand elasticity of -0.29± 0.1, or that a 10 percent increase in average price results in a decline in urban water consumption of 1.9 to 3.9 percent. In addition, consequence of lower urban water consumption is the most on groundwater extraction which amounts to 1.3± 0.1, or that response of a 10 percent decrease in drinking water consumption could cause a decline in groundwater extraction of 12 to 14 percent. Last but not the least, 1 percent decrease in underground extraction for urban water raises 13.2 ± 6.7 centimeters of GRACE water level after three months. Moreover, observing significant effects of covid-related determinants for calming down trend of groundwater extraction, we alert for post-covid deterioration of subsidence area due to regrowth of water consumption.