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Water Gain: As a Common Good Becomes a Financial Opportunity

Author

Listed:
  • Cristiana Fiorelli

    (PhD Student, University of Teramo, Italy)

  • Marco Mele

    (University of Teramo, Italy)

Abstract

The purpose of this paper is to analyze how the water has become, indirectly, an important element also in the financial markets. Nevertheless, its particular nature, vital and instrumental for human life, gives this item a peculiarity: It is difficult to generate a price but, equally, it attracts the agents that operate in the financial markets. But, like any other commodity, the water is starting to take hold in the equity markets. There is, however, a difficulty. No one can change the water as it does for other financial instruments present in the stock markets. For this reason, the investors began to bet on companies that have as reference the water sector, considered a booming business. The present work aims to analyze the performance of the assets related to the water sector in the financial markets, comparing performance against major indexes, such as Dow Jones, Nasdaq and SP 500. Next, we wanted to verify the existence of a causal link between the water and the SP 500 index in order to confirm the hypothesis that the water has become, in financial markets, a safe haven.

Suggested Citation

  • Cristiana Fiorelli & Marco Mele, 2017. "Water Gain: As a Common Good Becomes a Financial Opportunity," International Journal of Economics and Financial Issues, Econjournals, vol. 7(2), pages 626-630.
    • Handle: RePEc:eco:journ1:2017-02-82
    as

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    References listed on IDEAS

    as
    1. Dirk G. Baur & Brian M. Lucey, 2010. "Is Gold a Hedge or a Safe Haven? An Analysis of Stocks, Bonds and Gold," The Financial Review, Eastern Finance Association, vol. 45(2), pages 217-229, May.
    2. Baur, Dirk G. & McDermott, Thomas K., 2010. "Is gold a safe haven? International evidence," Journal of Banking & Finance, Elsevier, vol. 34(8), pages 1886-1898, August.
    3. Christian Upper, 2001. "How safe was the "Safe Haven"? Financial market liquidity during the 1998 turbulences," BIS Papers chapters, in: Bank for International Settlements (ed.), Market liquidity: proceedings of a workshop held at the BIS, volume 2, pages 241-266, Bank for International Settlements.
    4. Yizheng Jin & Bin Li & Eduardo Roca & Victor Wong, 2016. "Water as an investment: liquid yet illiquid!," Applied Economics, Taylor & Francis Journals, vol. 48(9), pages 731-745, February.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Rajibur Reza & Gurudeo Anand Tularam & Xiyang Li & Bin Li, 2022. "Investments in the Asian water sector: an analysis based on the DCC-GARCH model," Palgrave Communications, Palgrave Macmillan, vol. 9(1), pages 1-9, December.
    2. Reza, Rajibur & Tularam, Gurudeo Anand & Li, Bin, 2021. "A review of global research on private investment in the water sector," Utilities Policy, Elsevier, vol. 72(C).

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    More about this item

    Keywords

    Financial Markets; US DJ Water; Granger Test;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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