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Long-run Study of Residential Water Consumption

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  • Céline Nauges
  • Alban Thomas

Abstract

The estimation of dynamic models and themeasure of long-run effects arerare in residential water demand studies. Weshow in this paper that a dynamicmodel of water consumption can be derived froma structural optimisation programsolved by local communities. Thisnonlinear model is estimated on asample of French municipalities and is foundasymptotically equivalent to a dynamic panel data model that is linear in theparameters. The latter includes anoriginal error-component structure that allowsfor a flexible heterogeneity pattern, including both the usual idiosyncraticeffect, and an additional individualeffect affected by a multiplicative time-varyingparameter. As usual GMM estimators for panel data are not consistent inthis case, we propose a new GMMprocedure that yields consistent and efficientestimates of short- and long-runprice elasticities (respectively −0.26 and−0.40). Copyright Kluwer Academic Publishers 2003

Suggested Citation

  • Céline Nauges & Alban Thomas, 2003. "Long-run Study of Residential Water Consumption," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 26(1), pages 25-43, September.
  • Handle: RePEc:kap:enreec:v:26:y:2003:i:1:p:25-43
    DOI: 10.1023/A:1025673318692
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    References listed on IDEAS

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    Cited by:

    1. R. Quentin Grafton & Tom Kompas & Hang To & Michael Ward, 2009. "Residential Water Consumption: A Cross Country Analysis," Environmental Economics Research Hub Research Reports 0923, Environmental Economics Research Hub, Crawford School of Public Policy, The Australian National University, revised Aug 2009.
    2. 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. 10, pages 161-184, May.
    3. Ben Zaied Younes, 2013. "A long-run analysis of residential water consumption," Economics Bulletin, AccessEcon, vol. 33(1), pages 536-544.
    4. Havranek, Tomas & Irsova, Zuzana & Vlach, Tomas, 2016. "Publication Bias in Measuring the Income Elasticity of Water Demand," MPRA Paper 75247, University Library of Munich, Germany.
    5. 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).
    6. 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, 2016, Boston, Massachusetts 236049, Agricultural and Applied Economics Association.
    7. Schleich, Joachim & Hillenbrand, Thomas, 2009. "Determinants of residential water demand in Germany," Ecological Economics, Elsevier, vol. 68(6), pages 1756-1769, April.
    8. Jean-Daniel Rinaudo & Noémie Neverre & Marielle Montginoul, 2012. "Simulating the Impact of Pricing Policies on Residential Water Demand: A Southern France Case Study," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 26(7), pages 2057-2068, May.
    9. David R. Bell & Ronald C. Griffin, 2011. "Urban Water Demand with Periodic Error Correction," Land Economics, University of Wisconsin Press, vol. 87(3), pages 528-544.
    10. Tomas Havranek & Zuzana Irsova & Tomas Vlach, 2017. "Measuring the Income Elasticity of Water Demand: The Importance of Publication and Endogeneity Biases," Working Papers IES 2017/02, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Feb 2017.
    11. 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.
    12. Zhao, Jing & Ni, Hongzhen & Peng, Xiujian & Li, Jifeng & Chen, Genfa & Liu, Jinhua, 2016. "Impact of water price reform on water conservation and economic growth in China," Economic Analysis and Policy, Elsevier, vol. 51(C), pages 90-103.
    13. María Angeles García Valiñas, 2005. "Promotion and remuneration of university professors: from the LRU to the COU," Hacienda Pública Española, IEF, vol. 172(1), pages 119-143, June.
    14. Subhash Andey & Prakash Kelkar, 2009. "Influence of Intermittent and Continuous Modes of Water Supply on Domestic Water Consumption," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 23(12), pages 2555-2566, September.
    15. Marie-Estelle Binet & Younes Ben Zaïd, 2011. "A Seasonal Integration and Cointegration Analysis of Residential Water Demand in Tunisia," Economics Working Paper Archive (University of Rennes 1 & University of Caen) 201122, Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS.
    16. Barry Abrams & Santharajah Kumaradevan & Vasilis Sarafidis & Frank Spaninks, 2012. "An Econometric Assessment of Pricing Sydney’s Residential Water Use," The Economic Record, The Economic Society of Australia, vol. 88(280), pages 89-105, March.
    17. Teresa Torregrosa & Martín Sevilla & Borja Montaño & Victoria López-Vico, 2010. "The Integrated Management of Water Resources in Marina Baja (Alicante, Spain). A Simultaneous Equation Model," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 24(14), pages 3799-3815, November.
    18. Sara Fontdecaba & Pere Grima & Lluís Marco & Lourdes Rodero & José Sánchez-Espigares & Ignasi Solé & Xavier Tort-Martorell & Dominique Demessence & Victor Martínez De Pablo & Jordi Zubelzu, 2012. "A Methodology to Model Water Demand based on the Identification of Homogenous Client Segments. Application to the City of Barcelona," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 26(2), pages 499-516, January.
    19. Worthington, Andrew C., 2010. "Commercial and Industrial Water Demand Estimation: Theoretical and Methodological Guidelines for Applied Economics Research/Estimación de la demanda de agua comercial e industrial: pautas teóricas y m," Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 28, pages 237-258, Agosto.
    20. Chih-Hao Wang & Hongwei Dong, 2017. "Responding to the Drought: A Spatial Statistical Approach to Investigating Residential Water Consumption in Fresno, California," Sustainability, MDPI, Open Access Journal, vol. 9(2), pages 1-15, February.
    21. Montginoul, Marielle & Rinaudo, Jean-Daniel, 2011. "Controlling households' drilling fever in France: An economic modeling approach," Ecological Economics, Elsevier, vol. 71(C), pages 140-150.
    22. 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.
    23. Maria de los Angeles Garcia Valinas, 2006. "Analysing rationing policies: drought and its effects on urban users' welfare (Analysing rationing policies during drought)," Applied Economics, Taylor & Francis Journals, vol. 38(8), pages 955-965.

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