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The determinants of residential water demand: empirical evidence for a panel of Italian municipalities

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  • Massimiliano Mazzanti
  • Anna Montini

Abstract

We present empirical evidence on the determinants of residential water demand for one Italian region, Emilia-Romagna, by using municipal panel data. The estimated water demand price elasticity is negative, showing values between -0.99 and -1.33, never significantly different from one, if we consider different specifications without and with additional socio-economic factors. Income results associated to a positive elasticity, though lower than one. The role of other socio-economic territory-specific determinants is less relevant, with the exception of altitude. The relative high value of price elasticity is deemed consistent with the higher level of regional water prices compared to the national average.

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  • Massimiliano Mazzanti & Anna Montini, 2006. "The determinants of residential water demand: empirical evidence for a panel of Italian municipalities," Applied Economics Letters, Taylor & Francis Journals, vol. 13(2), pages 107-111.
    • Handle: RePEc:taf:apeclt:v:13:y:2006:i:2:p:107-111
    DOI: 10.1080/13504850500390788
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    1. Jasper M. Dalhuisen & Raymond J. G. M. Florax & JHenri L. F. de Groot & Peter Nijkamp, 2003. "Price and Income Elasticities of Residential Water Demand: A Meta-Analysis," Land Economics, University of Wisconsin Press, vol. 79(2), pages 292-308.
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    1. Henrique Monteiro, 2010. "Residential Water Demand in Portugal: checking for efficiency-based justifications for increasing block tariffs," Working Papers Series 1 ercwp0110, ISCTE-IUL, Business Research Unit (BRU-IUL).
    2. Buck, Steven & Nemati, Mehdi & Sunding, David, 2016. "The Welfare Consequences of the 2015 California Drought Mandate: Evidence from New Results on Monthly Water Demand," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236049, Agricultural and Applied Economics Association.
    3. Schleich, Joachim & Hillenbrand, Thomas, 2009. "Determinants of residential water demand in Germany," Ecological Economics, Elsevier, vol. 68(6), pages 1756-1769, April.
    4. Lucia Cecchi & Enrico Conti & Letizia Ravagli, 2022. "The determinants of domestic water demand and the equity of tariffs: Empirical evidence from an Italian municipality," ECONOMIA PUBBLICA, FrancoAngeli Editore, vol. 2022(3), pages 373-395.
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    6. Maria A. García‐Valiñas & Roberto Martínez‐Espiñeira & Francisco González‐Gómez, 2010. "Economics of Water Reform in the Murray-Darling Basin," Centre for Water Economics, Environment and Policy Papers 1005, Centre for Water Economics, Environment and Policy, Crawford School of Public Policy, The Australian National University.
    7. Maria A. García-Valiñas & Roberto Martínez-Francisco & González-Gómez, 2010. "Water affordability: alternativem measurement and explanatory Factors in Andalusia," Centre for Water Economics, Environment and Policy Papers 1014, Centre for Water Economics, Environment and Policy, Crawford School of Public Policy, The Australian National University.
    8. Seul-Ye Lim & Jeoung-Sik Min & Seung-Hoon Yoo, 2021. "Price and Income Elasticities of Residential Heat Demand from District Heating System: A Price Sensitivity Measurement Experiment in South Korea," Sustainability, MDPI, vol. 13(13), pages 1-10, June.
    9. Dexter V. L. Hunt & Christopher D. F. Rogers, 2014. "A Benchmarking System for Domestic Water Use," Sustainability, MDPI, vol. 6(5), pages 1-26, May.
    10. Steven Buck & Mehdi Nemati & David Sunding, 2023. "Consumer welfare consequences of the California drought conservation mandate," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 45(1), pages 510-533, March.
    11. Abolhasani, L. & Tajabadi, M. & Shahnoushi Forushahi, N., 2018. "Price elasticity of residential water demand: a Meta analysis of studies on water demand, (case study: Iran)," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 275890, International Association of Agricultural Economists.
    12. Renzetti, Steven & Dupont, Diane P. & Chitsinde, Tina, 2015. "An empirical examination of the distributional impacts of water pricing reforms," Utilities Policy, Elsevier, vol. 34(C), pages 63-69.
    13. Antonio Musolesi & Mario Nosvelli, 2007. "Dynamics of residential water consumption in a panel of Italian municipalities," Applied Economics Letters, Taylor & Francis Journals, vol. 14(6), pages 441-444.
    14. David Hoyos & Alaitz Artabe, 2017. "Regional Differences in the Price Elasticity of Residential Water Demand in Spain," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 31(3), pages 847-865, February.
    15. Monia Castellini & Vincenzo Riso, 2023. "Risk Management in Practice: A Multiple Case Study Analysis in Italian Municipalities," JRFM, MDPI, vol. 16(1), pages 1-15, January.
    16. Giulia Romano & Nicola Salvati & Andrea Guerrini, 2014. "Factors Affecting Water Utility Companies’ Decision to Promote the Reduction of Household Water Consumption," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 28(15), pages 5491-5505, December.
    17. Massarutto, Antonio, 2020. "Servant of too many masters: Residential water pricing and the challenge of sustainability," Utilities Policy, Elsevier, vol. 63(C).
    18. Yarela Flores Arévalo & Roberto D. Ponce Oliva & Francisco J. Fernández & Felipe Vásquez-Lavin, 2021. "Sensitivity of Water Price Elasticity Estimates to Different Data Aggregation Levels," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 35(6), pages 2039-2052, April.
    19. Cullmann, Astrid & Stiel, Caroline, 2022. "Cost and productivity effects of demographic changes on local water service," Utilities Policy, Elsevier, vol. 79(C).
    20. Fercovic, Juan & Foster, William & Melo, Oscar, 2015. "Residential Water Consumption in Chile: Economic Development and Climate Change," 2015 Conference, August 9-14, 2015, Milan, Italy 211631, International Association of Agricultural Economists.

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    More about this item

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water

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