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Residential Water Demand: A Panel Cointegration Approach and Application to Tunisia

Author

Listed:
  • Younes Ben Zaied

    (The University of Rennes 1, France)

  • Mohamed Salah Matoussi

Abstract

In this paper we use an appropriate econometric technique to analyze residential water demand in Tunisia. The extension of the data used by Ayadi et al. (2002) leads us to a non-stationary panel dataset which allows the application of panel cointegration tests and the FMOLS method to estimate the long-run water price elasticity in Tunisia. Our work confirms the results which claim that water tariffs can play an active role in conserving the precious resource in countries characterized by scarcity, volatility and low water quality like Tunisia.

Suggested Citation

  • Younes Ben Zaied & Mohamed Salah Matoussi, 2011. "Residential Water Demand: A Panel Cointegration Approach and Application to Tunisia," Working Papers 656, Economic Research Forum, revised 12 Jan 2011.
    • Handle: RePEc:erg:wpaper:656
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    References listed on IDEAS

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    7. Maddala, G S & Wu, Shaowen, 1999. "A Comparative Study of Unit Root Tests with Panel Data and a New Simple Test," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(0), pages 631-652, Special I.
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    10. G. S. Maddala & Shaowen Wu, 1999. "A Comparative Study of Unit Root Tests with Panel Data and a New Simple Test," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(S1), pages 631-652, November.
    11. John A. Nordin, 1976. "A Proposed Modification of Taylor's Demand Analysis: Comment," Bell Journal of Economics, The RAND Corporation, vol. 7(2), pages 719-721, Autumn.
    12. Pedroni, Peter, 1999. "Critical Values for Cointegration Tests in Heterogeneous Panels with Multiple Regressors," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(0), pages 653-670, Special I.
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