A gravity model of virtual water trade

Andrea Fracasso

Ecological Economics, 2014, vol. 108, issue C, 215-228

Abstract: This work investigates the determinants of bilateral ‘virtual water trade (VWT) flows’ by means of an estimated gravity model of trade applied to the services of the water embodied in the agricultural goods exchanged across countries. In line with the recent literature on the gravity model of trade, the paper presents a battery of estimation methods. The analysis shows that bilateral VWT flows are affected by the classical determinants of trade, by national water endowments, and by the level of pressure on water resources. These general findings are robust, even though some variation can be observed across the estimation methods and, in particular, when smaller sub-samples of countries (such as continents and regional groups) are considered. This contributes to account for the mixed evidence in the literature on the importance of water endowments for the VWT flows.

Keywords: Virtual water; Gravity model of trade; Water scarcity (search for similar items in EconPapers)
JEL-codes: F11 F18 Q25 Q56 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (38)

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Working Paper: A gravity model of virtual water trade (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolec:v:108:y:2014:i:c:p:215-228

DOI: 10.1016/j.ecolecon.2014.10.010

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