An econometric study of industrial water demands in British Columbia, Canada

Abstract

Despite the importance of water use by the industrial sector, little economic research has been conducted to study the nature of industrial water demands,. This paper uses a relatively simple model of input demands to test whether industrial water use is sensitive to changes to input prices or the level of production. Demands for four aspects of industrial water use (intake, treatment prior to use, recirculation, and treatment prior to discharge) are estimated as a system of simultaneous equations. The data set is a 1981 cross section of firm level observations on water use and expenditure. Empirical results are reported for four manufacturing subgroups: petrochemicals, heavy industry, forest industry, and light industry. Intake price elasticities range from -0.12 to -0.54 and intake elasticities with respect to the level of output range from 0.76 to 1.90. The cross price elasticity between intake and recirculation is positive for all subgroups (indicating substitutability) and ranges from 0.14 to 0.26.

Urban Water Demand for Service and Industrial Use: The Case of Zaragoza

“…inelastic demand). This result is within the range of values previously obtained for service users (Williams and Suh 1986;Schneider and Whitlach 1991), and industrial users (Babin et al 1982;Williams and Suh 1986;Renzetti 1988;Reynaud 2003). This finding is not surprising when two issues are considered: firstly, service and industrial users think they are paying less than the actual price, as shown by the estimated value of the price perception parameter ( k = 6.004); secondly, service and industrial users are subject to the same price levels as residential users.…”

Mapping water provisioning services to support the ecosystem–water–food–energy nexus in the Danube river basin

“…With the cost function approach, it is assumed that firms choose water and the others inputs in order to minimize the production cost for a given level of output. Some specific applications of the cost function approach for valuing water include Renzetti (1988) and Dupont and Renzetti (2001) in Canada, Reynaud (2003) in France, and Féres and Reynaud (2005) in Brazil. With the production function approach (primal approach), the marginal value of water is obtained from the estimated production function, see Wang and Lall (2002) for a specific application for valuing water used by industrial plants in China.…”

Household Choice of Drinking–Water Source in the Philippines

“…Studies on the demand for water can be divided into three main groups: (i) residential demand for water (Mu et al 1990;Madanat and Humplick, 1993); (ii) industrial demand for water, (Renzetti, 1988); and (iii) agricultural demand for water (Ogg and Gollehon, 1989).…”