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Regional Differences in the Price Elasticity of Residential Water Demand in Spain

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  • David Hoyos

    (University of the Basque Country (UPV/EHU), Faculty of Economics and Business
    University of the Basque Country (UPV/EHU))

  • Alaitz Artabe

    (University of the Basque Country (UPV/EHU), Faculty of Economics and Business)

Abstract

This paper explores the influence of regional climate variability on the elasticity of price for residential water demand in Spain. The data comes from the Spanish Survey of Family Budget (INE 2012), a national based survey of household living conditions including more than 15,000 observations. The econometric analysis included other determinants of residential water demand in Spain such as income and household characteristics. In line with the broad literature, the demand for water in Spain is found to be inelastic, although price elasticity differs notably when accounting for different climatic regions in the territory. The results have noteworthy policy implications as water pricing is considered an efficient means of long term sustainable planning of water resources management. The results imply that policy makers may have reasons to explore differentiating the impacts of water efficiency measures by region.

Suggested Citation

  • David Hoyos & Alaitz Artabe, 2017. "Regional Differences in the Price Elasticity of Residential Water Demand in Spain," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 31(3), pages 847-865, February.
    • Handle: RePEc:spr:waterr:v:31:y:2017:i:3:d:10.1007_s11269-016-1542-0
    DOI: 10.1007/s11269-016-1542-0
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    4. Roberto Balado-Naves & Marian Garcia-Valiñas & David Roibas, 2023. "Efficiency, perceived prices, and household water demand: A stochastic frontier analysis for the Spanish city of Gijón," Efficiency Series Papers 2023/01, University of Oviedo, Department of Economics, Oviedo Efficiency Group (OEG).
    5. Roberto Balado-Naves & Marian Garcia-Valiñas & David Roibas, 2023. "Efficiency, perceived prices, and household water demand: A stochastic frontier analysis for the Spanish city of Gijón," Working Papers hal-04147781, HAL.
    6. Mónica Maldonado-Devis & Vicent Almenar-Llongo, 2021. "A Panel Data Estimation of Domestic Water Demand with IRT Tariff Structure: The Case of the City of Valencia (Spain)," Sustainability, MDPI, vol. 13(3), pages 1-26, January.
    7. María Ángeles García-Valiñas & Sara Suárez-Fernández, 2022. "Are Economic Tools Useful to Manage Residential Water Demand? A Review of Old Issues and Emerging Topics," Post-Print hal-04067487, HAL.

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