This book applies rigorous economic analysis to investigate the optimal surface and ground water allocation to meet the current and future urban water demands in the Province of Jakarta by considering simultaneously the investment options to improve and expand piped water supplies and to conserve groundwater resource. Combinations of these two water management options, together with the variation in economic growths and discount rates, provide wide ranges of economic information and policy implications to explore public choice of municipal water supply system. This book provides necessary economic information to the policy makers to manage water resources optimally, to estimate the economic value of the water, to measure the economic efficiency of policy scenarios, and to select the most appropriate scenario for managing water resources. The outputs indicate that thought investment in water infrastructures could increase piped water supply, it has no significant role in reducing the cumulative groundwater extraction to save groundwater stock. This encourages the government to pay more attention to groundwater, the currently neglected resource in the region.