Determinants of water consumption in Thailand: sustainable development of water resources

Sasipha Tangworachai, Wing-Keung Wong and Fang-Yi Lo

Studies in Economics and Finance, 2023, vol. 40, issue 5, 950-970

Abstract: Purpose - Freshwater availability is reducing globally, due to increasing demand with population growth and climate change and is disproportionately impacting developing countries. This study aims to investigate the dynamics of water access and consumption across all regions of Thailand with various characteristics and water systems. Understanding the relationship between institutional, economic and climate variables in Thailand’s water management is important for water scarcity planning. Our paper fills a gap in the literature by examining the determinants of water consumption and exploring potential water management policies. Design/methodology/approach - The authors empirically analyze the determinants of water consumption in Thailand, including institutional, economic and climate variables. The authors use data sets from both metropolitan and provincial waterworks authorities (PWA), as well as economic and meteorological macro-level data. The authors also adopt an auto-regressive distributed lag (ARDL) model and a Johansen cointegration test to estimate short- and long-run effects of the variables on water consumption. Findings - The authors confirm a negative relationship between water pricing and consumption and verify a positive relationship between economic growth and water consumption across most regions of Thailand. Furthermore, the authors reveal a clear relationship between climate factors and water consumption and an inverse relationship between income and water consumption in metropolitan area. Findings indicate that authorities, especially PWA, should examine high water use in agriculture and develop regulations to ensure equitable water distribution to sustain economic growth. The authors recommend that water prices are increased within specific income thresholds to prevent impacting low-income families and to secure higher public revenue. In pursuit of environmental sustainability, the authors also recommend increasing public awareness of freshwater scarcity through education programs and investment in water-saving technologies. Differences among regions should be considered when developing water management strategies, which could be monitored through the respective water boards. Originality/value - This study provides deep insight into the key factors that drive both water prices and water consumption in poor and rich areas. The unique nature of the research indicated that the paper will be of interest to policymakers and the academic community. The findings are relevant for water consumption management in Thailand and other developing countries with similar characteristics.

Keywords: Water consumption; Economic growth; Water prices; Water resources; Institutional factors; Sustainable development (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eme:sefpps:sef-06-2022-0310

DOI: 10.1108/SEF-06-2022-0310

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