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

15 Pages Posted: 7 Mar 2005

See all articles by Massimiliano Mazzanti

Massimiliano Mazzanti

University of Ferrara & CERIS CNR, Italy; CESAER INRA, UMR, France

Anna Montini

University of Bologna - Department of Economics; Italian National Research Council (CNR) - Centre for Economic Research on Firms and Growth (CERIS)

Date Written: February 2005

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 micro-economic 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

JEL Classification: C23, D12, Q25

Suggested Citation

Mazzanti, Massimiliano and Montini, Anna, The Determinants of Residential Water Demand Empirical Evidence for a Panel of Italian Municipalities (February 2005). Available at SSRN: https://ssrn.com/abstract=670234 or http://dx.doi.org/10.2139/ssrn.670234

Massimiliano Mazzanti (Contact Author)

University of Ferrara & CERIS CNR, Italy ( email )

via Voltapaletto, 11
Ferrara, 44100
Italy

CESAER INRA, UMR, France ( email )

via Bassini 15
Milan
Italy

Anna Montini

University of Bologna - Department of Economics ( email )

Strada Maggiore 45
Bologna, 40125
Italy

Italian National Research Council (CNR) - Centre for Economic Research on Firms and Growth (CERIS)

Via Avogadro 8
10121 Torino
Italy

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