The Determinants of Residential Water Demand Empirical Evidence for a Panel of Italian Municipalities

Massimiliano Mazzanti and Anna Montini (anna.montini@unibo.it)

No 2005.27, Working Papers from Fondazione Eni Enrico Mattei

Abstract: We present empirical evidence on the determinants of residential water demand for one Italian region, Emilia-Romagna, by using municipal panel data. The estimated water demand price elasticity is negative, showing values between -0.99 and -1.33, never significantly different from one, considering different specifications without and with additional socio-economic factors. Income results associated to a positive elasticity, though lower than one. The role of other socio-economic territory-specific determinants is less relevant, with the exception of altitude. The relative high value of price elasticity is deemed consistent with the higher level of Regional water prices compared to the national average. The applied analysis is an important starting point for the Italian environment, which lacks reliable estimates on elasticities concerning microeconomic water demand studies. The estimation of price elasticity and the investigation on the determinants of water demand are necessary steps for both private and private-public management of water resources within the new framework originating from the implementation of the 96/1994 National water bill.

Keywords: Residential water demand; Price elasticity; Income elasticity; Water pricing (search for similar items in EconPapers)
JEL-codes: C23 D12 Q25 (search for similar items in EconPapers)
Date: 2005-02
New Economics Papers: this item is included in nep-geo and nep-ure
References: View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:fem:femwpa:2005.27

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