Estimation of Demand for Bottled Water in Peshawar–Pakistan (A Case Study of University Campus)

Though three-fourth of the earth’s surface is enclosed with water but only less than one percent of the water can be used for drinking purposes. Safe drinking water can be thought like an economic good. The present study estimates the demand for bottled drinking water in the university campus of Peshawar, Pakistan. Econometric model was used to analyze factor affecting demand and consumption of bottled drinking water. The paper finds that own-price of bottled water, household’s income, price of substitutes, awareness and taste and preferences are the most important determinants of quantity demanded of bottled water. The data analysis shows that bottled drinking water may be thought of as an ordinary but price elastic good with ?p of -0.21. The results also show that bottled drinking water is a necessity but a normal good as income elasticity of demand (?y) greater than zero but less than one. The study concludes that bottled drinking water users are health related risks averse and suggests that focus should be given to awareness level of the respondents in study area. The government must subsidize prices, and should take steps for maintaining quality standard, and accessibility to bottled drinking water.