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Potential for Pricing Policies in Water Resource Management: Estimation of Urban Residential Water Demand in Zaragoza, Spain

Fernando Arbues and Inmaculada Villanua
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Fernando Arbues: Department of Public Economics, University of Zaragoza, Fac. CC. Económicas y Empresariales, Gran Via 2, 50005 Zaragoza, Spain,
Inmaculada Villanua: Department of Economic Analysis, University of Zaragoza, E. U. Estudios Sociales, Violante de Hungría 23, 50009 Zaragoza, Spain,

Urban Studies, 2006, vol. 43, issue 13, 2421-2442

Abstract: This paper presents an empirical study to estimate the urban residential water demand in Zaragoza, Spain; this allows the testing of the short-run sensitivity of water demand to changes in a set of socioeconomic variables and especially in prices. A residential water demand model is estimated using a dynamic panel data technique. Furthermore, three water demand equations have been proposed and two alternative process specifications are applied. The empirical application suggests that the linear demand specification is the most adequate. Finally, the results indicate that domestic demands are inelastic with respect to price.

Date: 2006
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Handle: RePEc:sae:urbstu:v:43:y:2006:i:13:p:2421-2442