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The Determinants of Residential Water Demand Empirical Evidence for a Panel of Italian Municipalities

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  • Massimiliano Mazzanti

    (University of Ferrara)

  • Anna Montini

    (University of Bologna and CERIS/DSE-CNR)

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, considering 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. The applied analysis is an important starting point for the Italian environment, which lacks reliable estimates on elasticities concerning microeconomic water demand studies. The estimation of price elasticity and the investigation on the determinants of water demand are necessary steps for both private and private-public management of water resources within the new framework originating from the implementation of the 96/1994 National water bill.

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Bibliographic Info

Paper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2005.27.

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Date of creation: Feb 2005
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Handle: RePEc:fem:femwpa:2005.27

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Keywords: Residential water demand; Price elasticity; Income elasticity; Water pricing;

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  1. R. Martinez-EspiƱeira, 2002. "Residential Water Demand in the Northwest of Spain," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 21(2), pages 161-187, February.
  2. 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.
  3. Roberto Martinez-Espineira & Celine Nauges, 2004. "Is all domestic water consumption sensitive to price control?," Applied Economics, Taylor & Francis Journals, vol. 36(15), pages 1697-1703.
  4. Arbues, Fernando & Garcia-Valinas, Maria Angeles & Martinez-Espineira, Roberto, 2003. "Estimation of residential water demand: a state-of-the-art review," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 32(1), pages 81-102, March.
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Cited by:
  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. Dexter V. L. Hunt & Christopher D. F. Rogers, 2014. "A Benchmarking System for Domestic Water Use," Sustainability, MDPI, Open Access Journal, vol. 6(5), pages 2993-3018, May.
  3. Schleich, Joachim & Hillenbrand, Thomas, 2009. "Determinants of residential water demand in Germany," Ecological Economics, Elsevier, vol. 68(6), pages 1756-1769, April.

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