An Estimation of Residential Water Demand Using Co-integration and Error Correction Techniques
AbstractThe purpose of this paper is to measure the short- and long-run effect ofthe price of water on residential water use. Unit root tests reveal that water use series and series of other variables affecting use are non-stationary. However, a long-run co-integrating relationship is found in the demand model, which makes possible to obtain a partial correction term and to estimate an error correction model. The empirical application uses monthly time-series observations from Seville (Spain). The price-elasticity of demand is estimated as around -0.1 in the short run and -0.5 in the long run. These results are robust to the use of different specifications.
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Bibliographic InfoPaper provided by EconWPA in its series Others with number 0410002.
Length: 47 pages
Date of creation: 03 Oct 2004
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seasonal unit roots; residential water demand; price elasticity; time-series; co-integration; Error Correction Model.;
Other versions of this item:
- Roberto Martínez-Espiñeira, 2007. "An estimation of residential water demand using co-integration and error correction tec hniques," Journal of Applied Economics, Universidad del CEMA, vol. 0, pages 161-184, May.
- Martinez-Espineira, Roberto, 2005. "An Estimation of Residential Water Demand Using Co-Integration and Error Correction Techniques," MPRA Paper 615, University Library of Munich, Germany, revised Jan 2006.
- C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-10-18 (All new papers)
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