Analysing industrial water demand in India: An input distance function approach

Surender Kumar

Working Papers from National Institute of Public Finance and Policy

Abstract: This study investigates the water demand of Indian manufacturing plants. It adopts an input distance function approach and approximates it by a translog form. Duality between cost function and input distance function is exploited to retrieve information concerning substitutability and the shadow price of water. The model is estimated, using linear programming approach, on a sample of 92 firms over the three years. The results show that the average shadow price of water is rupees 7.21 per kilolitre and the price elasticity of derived demand for water is high, -1.11 on average, a value similar to what has been found by other researchers working on developing countries (for example, China and Brazil). This indicates that water charges may be an effective instrument for water conservation.

Keywords: Input distance function; Industrial water demand; Translog form water; Price elasticity (search for similar items in EconPapers)
JEL-codes: C33 D20 Q25 (search for similar items in EconPapers)
Pages: 28
Date: 2004-03
Note: Working Paper 12, 2004
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Related works:
Working Paper: Analyzing Industrial Water Demand in India: An Input Distance Function Approach (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:npf:wpaper:04/12

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