Residential Water Demand: A Panel Cointegration Approach and Application to Tunisia

Ben Zaied Younes (ybzaied@gmail.com) and Mohamed Matoussi (msmat@gnet.tn)

No 656, Working Papers from Economic Research Forum

Abstract: In this paper we use an appropriate econometric technique to analyze residential water demand in Tunisia. The extension of the data used by Ayadi et al. (2002) leads us to a non-stationary panel dataset which allows the application of panel cointegration tests and the FMOLS method to estimate the long-run water price elasticity in Tunisia. Our work confirms the results which claim that water tariffs can play an active role in conserving the precious resource in countries characterized by scarcity, volatility and low water quality like Tunisia.

Pages: 16
Date: 2011-01-12, Revised 2011-01-12
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