Assume that you want to model the water demand of a city in order to forecast the municipal demands in the coming years. The historical data of water use, population, price, and precipitation in a 10-year time horizon are presented in Table 8. 24. Formulate a multiple regression model for estimating the water use data and comment on selecting the independent variables.

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TABLE 8.24 Historical Data of Water Use, Population, Price, and Precipitation in a 10-Year Time Horizon of Problem 6 Year Population Price (Monetary Unit/m) Annual Precipitation (mm) Water Use (m/year) 1991 21,603 0.25 812 2,032,410 1992 22,004 0.27 648 2,203,921 1993 23,017 0.29 670.4 2,178,329 1994 23,701 0.3 772 2,265,816 1995 24,430 0.31 670.4 2,323,782 1996 25,186 0.32 629.6 2,403,752 1997 26,001 0.33 576 2,647,942 1998 26,825 0.35 556 2,706,106 1999 27,781 0.31 656 2,700,314 2000 28,576 0.34 640 2,725,007