Pricing as a Tool for Water Demand Management in Water Scarcity Eng. Hazem Abdalla, Helena Naber, Eng. Razan Quossous, and Eng. Tamer Asad,  ECO Consult, Amman, Jordan. Abstract  The scarcity of water in jordan is mostly exemplified through the water scarcity index developed by m. Falkenmark which ranks jordan in the category of absolute water scarcity. Jordan has had many water shortage problems that are sensed throughout the different user sectors: commercial, industrial, agricultural, and domestic. So far, the efforts and approaches to deal with the water shortage have focused more on the supply management side of the equation, which includes the development of new water resources and their exploitation in order to augment the supply. However, supply management is becoming unsustainable due to environmental, hydrological, and financial reasons. This has led to the rise of some potential capital investment projects that require prohibitively high capital investment costs and high operation and maintenance costs such as the disi mudawarra to amman water conveyance system which exploits non-renewable groundwater fossil aquifer. Therefore, stronger emphasis on water demand management is essential. Water demand management seeks to provide incentives and mechanisms to promote water conservation and its efficient use, and thus induces treating water more like a commodity and not like an entitled free public service. For example some farmers in jordan pay only the price of pumping groundwater for irrigation and not for the water itself. This paper discusses the economic characteristics of water as a natural resource and looks into the market and non-market based incentives required to optimize water demand management. Furthermore, this paper presents water pricing as an example of a regulated incentive in water demand management across the various water users. It provides an overview of the development of pricing as a tool in water demand management in jordan. Studies involving main water user sectors are presented showing their present consumptions patterns, potential demand level reductions, current pricing practices and possible related topics for research. The paper concludes with recommendations and description of the conditions that enable the optimal use of pricing as a tool for water demand management in jordan.