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Dynamics of residential water consumption in a panel of Italian municipalities

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  • Antonio Musolesi
  • Mario Nosvelli

Abstract

The purpose of this study is to estimate a residential water demand function in a dynamic framework for a panel of Italian municipalities and to calculate both short-run and long-run price elasticities. The Generalized Method of Moments (GMM) provides a suitable framework for obtaining asymptotically efficient estimators in this context. Specifically, the system GMM estimator is applied, which improves the properties of the standard first-difference estimator. The most relevant result shows that persistence of habits is coupled with high long-term price elasticity which is higher, in absolute value, that the instantaneous (one-year) price elasticity. Under an economic policy perspective, the effects of policy interventions can be suitably evaluated only in the long-run.

Suggested Citation

  • Antonio Musolesi & Mario Nosvelli, 2007. "Dynamics of residential water consumption in a panel of Italian municipalities," Applied Economics Letters, Taylor & Francis Journals, vol. 14(6), pages 441-444.
    • Handle: RePEc:taf:apeclt:v:14:y:2007:i:6:p:441-444
    DOI: 10.1080/13504850500425642
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    1. 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.
    2. Schleich, Joachim & Hillenbrand, Thomas, 2009. "Determinants of residential water demand in Germany," Ecological Economics, Elsevier, vol. 68(6), pages 1756-1769, April.
    3. Lucia Cecchi & Enrico Conti & Letizia Ravagli, 2022. "The determinants of domestic water demand and the equity of tariffs: Empirical evidence from an Italian municipality," ECONOMIA PUBBLICA, FrancoAngeli Editore, vol. 2022(3), pages 373-395.
    4. Tomas Havranek & Zuzana Irsova & Tomas Vlach, 2018. "Measuring the Income Elasticity of Water Demand: The Importance of Publication and Endogeneity Biases," Land Economics, University of Wisconsin Press, vol. 94(2), pages 259-283.
    5. Chung Jen Yang & Ying Che Tsai & Joseph J. Tien, 2017. "The Impacts of Persistent Behaviour and Cost-Sharing Policy on Demand for Outpatient Visits by the Elderly: Evidence from Taiwan’s National Health Insurance," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 42(1), pages 31-52, January.
    6. 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.
    7. Maria A. García‐Valiñas & Roberto Martínez‐Espiñeira & Francisco González‐Gómez, 2010. "Economics of Water Reform in the Murray-Darling Basin," Centre for Water Economics, Environment and Policy Papers 1005, Centre for Water Economics, Environment and Policy, Crawford School of Public Policy, The Australian National University.
    8. Maria A. García-Valiñas & Roberto Martínez-Francisco & González-Gómez, 2010. "Water affordability: alternativem measurement and explanatory Factors in Andalusia," Centre for Water Economics, Environment and Policy Papers 1014, Centre for Water Economics, Environment and Policy, Crawford School of Public Policy, The Australian National University.
    9. Dua’a B. Telfah & Aiman Q. Jaradat & Rabah Ismail, 2024. "Examining the Long-Run and Short-Run Relationship between Water Demand and Socio-Economic Explanatory Variables: Evidence from Amman," Sustainability, MDPI, vol. 16(6), pages 1-23, March.
    10. Alexandros Polycarpou & Theodoros Zachariadis, 2013. "An Econometric Analysis of Residential Water Demand in Cyprus," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 27(1), pages 309-317, January.
    11. Jana Hortová & Ladislav Kristoufek, 2014. "Price elasticity of household water demand in the Czech Republic," Working Papers IES 2014/38, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Dec 2014.
    12. 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.
    13. Milan Ščasný & Šarlota Smutná, 2021. "Estimation of price and income elasticity of residential water demand in the Czech Republic over three decades," Journal of Consumer Affairs, Wiley Blackwell, vol. 55(2), pages 580-608, June.
    14. Antonio Musolesi & Mario Nosvelli, 2011. "Long-run water demand estimation: habits, adjustment dynamics and structural breaks," Applied Economics, Taylor & Francis Journals, vol. 43(17), pages 2111-2127.
    15. Arbues, Fernando & Villanu´a, Inmaculada & Barberán Ortí, Ramón, 2010. "Household size and residential water demand: an empirical approach," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 54(1), pages 1-20.
    16. 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.
    17. Joachim Schleich & Thomas Hillenbrand, 2019. "Residential water demand responds asymmetrically to rising and falling prices," Applied Economics, Taylor & Francis Journals, vol. 51(45), pages 4973-4981, September.
    18. 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.
    19. Arnaud Reynaud & Giulia Romano, 2018. "Advances in the Economic Analysis of Residential Water Use: An Introduction," Post-Print hal-01948631, HAL.
    20. D. Manouseli & B. Anderson & M. Nagarajan, 2018. "Domestic Water Demand During Droughts in Temperate Climates: Synthesising Evidence for an Integrated Framework," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 32(2), pages 433-447, January.
    21. Abbasi, Kaleemullah & Alam, Ashraful & Du, Min (Anna) & Huynh, Toan Luu Duc, 2021. "FinTech, SME efficiency and national culture: Evidence from OECD countries," Technological Forecasting and Social Change, Elsevier, vol. 163(C).
    22. 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.
    23. Roberto Martínez-Espiñeira & María Á. García-Valiñas, 2013. "Adopting versus adapting: adoption of water-saving technology versus water conservation habits in Spain," International Journal of Water Resources Development, Taylor & Francis Journals, vol. 29(3), pages 400-414, September.
    24. Fernando Arbués & Inmaculada Villanúa & Ramón Barberán, 2010. "Household size and residential water demand: an empirical approach ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 54(1), pages 61-80, January.
    25. Schleich, Joachim & Hillenbrand, Thomas, 2019. "Water demand responds asymmetrically to rising and falling prices," Working Papers "Sustainability and Innovation" S03/2019, Fraunhofer Institute for Systems and Innovation Research (ISI).

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