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Estimating Residential Demand for Water in Kuwait: A Cointegration Analysis

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  • Osama Alfalah

    (Gulf University for Science and Technology, Kuwait)

Abstract

This paper aims to investigate the determinants of water demand in Kuwait and assess their impact on consumption. To do this, we applied the cointegration regression and the error correction model (ECM) on annual time series data, covering the period from 1972 to 2019. We found that the price elasticity for fresh water demand in Kuwait is negative and elastic in the long run (-1.095), which is consistent with the existing literature. Also, we found that the income elasticity for demand was positive in the long run (0.234), however, no short run effect was found for either price or income. Our results suggest that policymakers should expect a long run impact when using water prices to adjust the consumption behavior in Kuwait.

Suggested Citation

  • Osama Alfalah, 2021. "Estimating Residential Demand for Water in Kuwait: A Cointegration Analysis," International Journal of Energy Economics and Policy, Econjournals, vol. 11(4), pages 283-287.
    • Handle: RePEc:eco:journ2:2021-04-35
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    References listed on IDEAS

    as
    1. A. Fadlelmawla, 2009. "Towards Sustainable Water Policy in Kuwait: Reforms of the Current Practices and the Required Investments, Institutional and Legislative Measures," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 23(10), pages 1969-1987, August.
    2. Wood, Michael & Alsayegh, Osamah A., 2014. "Impact of oil prices, economic diversification policies and energy conservation programs on the electricity and water demands in Kuwait," Energy Policy, Elsevier, vol. 66(C), pages 144-156.
    3. Unesco Unesco, 2015. "Water for a Sustainable World," Working Papers id:6657, eSocialSciences.
    4. Food and Agriculture Organization, 2013. "The State of Food and Agriculture, 2013," Working Papers id:5511, eSocialSciences.
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    Cited by:

    1. Mohtar Rasyid & Anita Kristina, 2021. "Estimation of Demand System for Household Energy Consumption: Empirical Evidence from Indonesia," International Journal of Energy Economics and Policy, Econjournals, vol. 11(6), pages 289-295.

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    More about this item

    Keywords

    Development; Structural Time Series Model; Energy Prices; Water Demand; Subsidies.;
    All these keywords.

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

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