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Self-selection bias and manufacturing firms' demand for water recirculation

Author

Listed:
  • Steven Renzetti

    (Department of Economics, Brock University)

  • Joel Brueau

    (Department of Economics, University of Saskatchewan)

  • Michel Villeneuve

    (Environment Canada)

Abstract

Relatively little is known of the factors which might influence firms' water recirculation decisions. This paper estimates an econometric model that accounts for potential self-selection bias and considers two facets of firms' recirculation behaviour: first, the discrete decision of whether to recirculate and, second, the decision of how much to recirculate. The model is estimated by applying the Heckman two-stage estimation procedure to data from Environment Canada's Industrial Water Use Survey. In the first stage, long run factors such as relative water scarcity and production technologies are found to influence the decision whether to recirculate water. In the second stage, the imputed prices of intake water and water recirculation as well as the scale of operations are found to influence the choice of the optimal quantity of water to recirculate.

Suggested Citation

  • Steven Renzetti & Joel Brueau & Michel Villeneuve, 2009. "Self-selection bias and manufacturing firms' demand for water recirculation," Working Papers 0902, Brock University, Department of Economics, revised Feb 2009.
    • Handle: RePEc:brk:wpaper:0902
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    References listed on IDEAS

    as
    1. Arnaud Reynaud, 2003. "An Econometric Estimation of Industrial Water Demand in France," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 25(2), pages 213-232, June.
    2. Steven Renzetti, 1992. "Estimating the Structure of Industrial Water Demands: The Case of Canadian Manufacturing," Land Economics, University of Wisconsin Press, vol. 68(4), pages 396-404.
    3. Diane Dupont & Steven Renzetti, 2001. "The Role of Water in Manufacturing," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 18(4), pages 411-432, April.
    4. Steven Renzetti (ed.), 2002. "The Economics of Industrial Water Use," Books, Edward Elgar Publishing, number 2196.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Joel Bruneau & Steven Renzetti, 2010. "A Longitudinal Study of Water Recycling in Canadian Manufacturing Plants," Working Papers 1001, Brock University, Department of Economics.

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    Keywords

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    JEL classification:

    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • Q21 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Demand and Supply; Prices

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