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An Econometric Estimation of Industrial Water Demand in France

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  • Arnaud Reynaud

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Abstract

This study investigates the structure of industrial water demand byestimating the derived demand for water on a sample of industrialestablishments located in the south-west of France. Productiontechnologies are represented by short-term variable cost functions andapproximated by a translog form. Industrial water use is modeled ashaving three components: the quantity of water bought to a waterutility, the quantity of autonomous water and the quantity of watertreated prior to use. We include in this framework water effluents,which are considered as a by-product of the production process, emittedby firms. Each of the three water components is treated as a separateinput and all are estimated as a system of simultaneous equations. Themodel is estimated on a sample of 51 industrial plants in the Girondedistrict observed from 1994 to 1996 using Seemingly Unrelated Regression(SUR) and Feasible Generalized Least Squares (FGLS). Results ofestimations show that industrial firms are sensitive to water priceinputs. Network water elasticity is estimated at −0.29. It variesfrom −0.10 to −0.79 according to the type of industryconsidered. Autonomous water price elasticity is not significant.Elasticity for treated water is evaluated at −1.42 at themean-sample and varies from −0.90 to −2.21 according to theindustry considered. Copyright Kluwer Academic Publishers 2003

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Bibliographic Info

Article provided by European Association of Environmental and Resource Economists in its journal Environmental and Resource Economics.

Volume (Year): 25 (2003)
Issue (Month): 2 (June)
Pages: 213-232

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Handle: RePEc:kap:enreec:v:25:y:2003:i:2:p:213-232

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Web page: http://www.springerlink.com/link.asp?id=100263

Related research

Keywords: cost function; industrial water demand; panel data; translog form; water;

References

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  1. Steven Renzetti, 1992. "Estimating the Structure of Industrial Water Demands: The Case of Canadian Manufacturing," Land Economics, University of Wisconsin Press, vol. 68(4), pages 396-404.
  2. Céline Nauges & Arnaud Reynaud, 2001. "Estimation de la demande domestique d'eau potable en France," Revue économique, Presses de Sciences-Po, vol. 52(1), pages 167-185.
  3. Renzetti, Steven, 1992. "Evaluating the welfare effects of reforming municipal water prices," Journal of Environmental Economics and Management, Elsevier, vol. 22(2), pages 147-163, March.
  4. Mary E. Renwick & Sandra O. Archibald, 1998. "Demand Side Management Policies for Residential Water Use: Who Bears the Conservation Burden?," Land Economics, University of Wisconsin Press, vol. 74(3), pages 343-359.
  5. Lars Gårn Hansen, 1996. "Water and Energy Price Impacts on Residential Water Demand in Copenhagen," Land Economics, University of Wisconsin Press, vol. 72(1), pages 66-79.
  6. Patrick Point, 1993. "Partage de la ressource en eau et demande d'alimentation en eau potable," Revue économique, Presses de Sciences-Po, vol. 0(4), pages 849-862.
  7. Varela-Ortega, Consuelo & M. Sumpsi, Jose & Garrido, Alberto & Blanco, Maria & Iglesias, Eva, 1998. "Water pricing policies, public decision making and farmers' response: implications for water policy," Agricultural Economics, Blackwell, vol. 19(1-2), pages 193-202, September.
  8. Moore, Michael R. & Negri, Donald H., 1992. "A Multicrop Production Model Of Irrigated Agriculture, Applied To Water Allocation Policy Of The Bureau Of Reclamation," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 17(01), July.
  9. Steven Renzetti, 1993. "Examining the Differences in Self- and Publicly Supplied Firms' Water Demands," Land Economics, University of Wisconsin Press, vol. 69(2), pages 181-188.
  10. David L. Chicoine & Ganapathi Ramamurthy, 1986. "Evidence on the Specification of Price in the Study of Domestic Water Demand," Land Economics, University of Wisconsin Press, vol. 62(1), pages 26-32.
  11. Diane Dupont & Steven Renzetti, 2001. "The Role of Water in Manufacturing," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 18(4), pages 411-432, April.
  12. Glenn D. Schaible, 1997. "Water Conservation Policy Analysis: An Interregional, Multi-Output, Primal-Dual Optimization Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(1), pages 163-177.
  13. Patrick Point, 1993. "Partage de la ressource en eau et demande d'alimentation en eau potable," Revue Économique, Programme National Persée, vol. 44(4), pages 849-862.
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Citations

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Cited by:
  1. José Féres & Arnaud Reynaud, 2005. "Assessing the Impact of Environmental Regulation on Industrial Water Use: Evidence From Brazil," Discussion Papers 1079, Instituto de Pesquisa Econômica Aplicada - IPEA.
  2. repec:ind:nipfwp:12 is not listed on IDEAS
  3. Ronaldo Seroa da Motta & Alban Thomas & Arnaud Reynaud & José Gustavo Féres, 2006. "Demanda Por Água E Custo De Controle Da Poluição Hídrica Em Indústrias Da Bacia Do Rio Paraíba Do Sul," Anais do XXXIV Encontro Nacional de Economia [Proceedings of the 34th Brazilian Economics Meeting] 67, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics].
  4. Fred Schroyen & Adekola Oyenuga, 2011. "Optimal pricing and capacity choice for a public service under risk of interruption," Journal of Regulatory Economics, Springer, vol. 39(3), pages 252-272, June.
  5. José Féres & Arnaud Reynaud & Alban Thomas, 2007. "Water Reuse in Brazilian Manufacturing Firms," Discussion Papers 1257, Instituto de Pesquisa Econômica Aplicada - IPEA.
  6. Christoph Jeßberger & Maximilian Sindram & Markus Zimmer, 2010. "Global Warming Induced Water-Cycle Changes and Industrial Production – A Scenario Analysis for the Upper Danube River Basin," Ifo Working Paper Series Ifo Working Paper Nr. 94, Ifo Institute for Economic Research at the University of Munich.
  7. José Feres & Alban Thomas & Arnaud Reynaud & Ronaldo Seroa da Motta, 2005. "Demanda por Água e Custo de Controle da Poluição Hídrica nas Indústrias da Bacia do Rio Paraíba do Sul," Discussion Papers 1084, Instituto de Pesquisa Econômica Aplicada - IPEA.
  8. Worthington, Andrew C., 2010. "Commercial and Industrial Water Demand Estimation: Theoretical and Methodological Guidelines for Applied Economics Research/Estimación de la demanda de agua comercial e industrial: pautas teóricas y," Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 28, pages 237-258, Agosto.
  9. Kumar, Surender, 2004. "Analysing industrial water demand in India: An input distance function approach," Working Papers 04/12, National Institute of Public Finance and Policy.
  10. Vallés-Giménez, Jaime & Zárate-Marco , Anabel, 2013. "Environmental taxation and industrial water use in Spain," Investigaciones Regionales, Asociación Española de Ciencia Regional, issue 25, pages 133-162.
  11. Cai, Ximing & Ringler, Claudia & You, Jiing-Yun, 2008. "Substitution between water and other agricultural inputs: Implications for water conservation in a River Basin context," Ecological Economics, Elsevier, vol. 66(1), pages 38-50, May.
  12. Steven Renzetti & Joel Brueau & Michel Villeneuve, 2009. "Self-selection bias and manufacturing firms' demand for water recirculation," Working Papers 0902, Brock University, Department of Economics, revised Feb 2009.
  13. Maria de los Angeles Garcia Valinas, 2006. "Analysing rationing policies: drought and its effects on urban users' welfare (Analysing rationing policies during drought)," Applied Economics, Taylor & Francis Journals, vol. 38(8), pages 955-965.
  14. María Angeles García Valiñas, 2005. "Promotion and remuneration of university professors: from the LRU to the COU," Hacienda Pública Española, IEF, vol. 172(1), pages 119-143, June.
  15. Garcia, Serge & Reynaud, Arnaud, 2004. "Estimating the benefits of efficient water pricing in France," Resource and Energy Economics, Elsevier, vol. 26(1), pages 1-25, March.

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