System dynamics modeling for municipal water demand estimation in an urban region under uncertain economic impacts

Accurate prediction of municipal water demand is critically important to water utilities in fast-growing urban regions for drinking water system planning, design, and water utility asset management. Achieving the desired prediction accuracy is challenging, however, because the forecasting model must simultaneously consider a variety of factors associated with climate changes, economic development, population growth and migration, and even consumer behavioral patterns. Traditional forecasting models such as multivariate regression and time series analysis, as well as advanced modeling techniques (e.g., expert systems and artificial neural networks), are often applied for either short- or long-term water demand projections, yet few can adequately manage the dynamics of a water supply system because of the limitations in modeling structures. Potential challenges also arise from a lack of long and continuous historical records of water demand and its dependent variables. The objectives of this study were to (1) thoroughly review water demand forecasting models over the past five decades, and (2) propose a new system dynamics model to reflect the intrinsic relationship between water demand and macroeconomic environment using out-of-sample estimation for long-term municipal water demand forecasts in a fast-growing urban region. This system dynamics model is based on a coupled modeling structure that takes into account the interactions among economic and social dimensions, offering a realistic platform for practical use. Practical implementation of this water demand forecasting tool was assessed by using a case study under the most recent alternate fluctuations of economic boom and downturn environments.