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

Author

Listed:
  • 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.

Suggested Citation

  • Massimiliano Mazzanti & Anna Montini, 2005. "The Determinants of Residential Water Demand Empirical Evidence for a Panel of Italian Municipalities," Working Papers 2005.27, Fondazione Eni Enrico Mattei.
  • Handle: RePEc:fem:femwpa:2005.27
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    References listed on IDEAS

    as
    1. 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.
    2. 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.
    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. R. Martinez-Espiñeira, 2002. "Residential Water Demand in the Northwest of Spain," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 21(2), pages 161-187, February.
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    Citations

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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. 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.
    3. Schleich, Joachim & Hillenbrand, Thomas, 2009. "Determinants of residential water demand in Germany," Ecological Economics, Elsevier, vol. 68(6), pages 1756-1769, April.
    4. 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.
    5. Giulia Romano & Nicola Salvati & Andrea Guerrini, 2014. "Factors Affecting Water Utility Companies’ Decision to Promote the Reduction of Household Water Consumption," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 28(15), pages 5491-5505, December.
    6. Fercovic, Juan & Foster, William & Melo, Oscar, 2015. "Residential Water Consumption in Chile: Economic Development and Climate Change," 2015 Conference, August 9-14, 2015, Milan, Italy 211631, International Association of Agricultural Economists.
    7. 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 1-26, May.
    8. 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.

    More about this item

    Keywords

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

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water

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