Urban water demand for industrial uses in Spain

Mur

2020

Water

Self Cite

This study examines, from an economic perspective, the factors influencing the decision of companies to use groundwater or not, in a context in which they have access to drinking publicly-supplied water and can also opt for self-supplying groundwater, and then estimates its groundwater demand. The Heckman two-stage model is applied, using microdata of a sample of 2579 manufacturing and service companies located in Zaragoza (Spain). The results of the first stage show that companies have economically rational behavior in the choice of their water supply sources: the probability to capture groundwater depends negatively on its cost and positively on the cost of publicly-supplied water. The results of the second stage indicate that the demand for self-supplied groundwater is normal, but inelastic (elasticity of −0.50), and that self-supplied and publicly-supplied water are substitutive inputs, where the cross-elasticity of the demand is much higher than the direct elasticity. These results warn of the undesirable consequences, on overall efficiency and environmental sustainability, of the lack of a volumetric fee that charges companies with the environmental and resource costs caused by the extraction of groundwater and emphasize the need for integrated management of all water resources.

Section: Discussion Of Resultssupporting

confidence: 88%

Section: Effect On the Probability Of Self-supply Groundwatersupporting

confidence: 79%

Section: Effect On the Probability Of Self-supply Groundwatercontrasting

confidence: 67%

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The Groundwater Demand for Industrial Uses in Areas with Access to Drinking Publicly-Supplied Water: A Microdata Analysis

Gracia‐de‐Rentería

Mur

2020

Water

Self Cite

“…This practice has been generalized, with most papers focusing on one (or a few) manufacturing activities of special interest because of their water utilization [23][24][25][26] and also covering the service sector [25,[27][28][29][30][31]. However, it is not common to analyse water demand for a vast number of sectors and subsectors, as evidenced by the fact that only seven of the references analysed in this review have considered more than 10 subsectors [32][33][34][35][36][37][38].…”

Section: A General Overviewmentioning

confidence: 99%

“…A common denominator in previous studies based on the cost function is the interest in the relationship (of complementarity or substitutability) between water and other inputs of the production process [18,22,26,30,[35][36][37][38][39][40][41][42]. Another dimension of this issue leads to the consideration of different water inputs.…”

Section: A General Overviewmentioning

confidence: 99%

Economic Determinants of Industrial Water Demand: A Review of the Applied Research Literature

Gracia‐de‐Rentería

2021

Water

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This paper surveys the empirical, economic literature focused on the determinants of industrial water demand. Both the methodological issues and the outcomes of the previous studies are presented and discussed. Attention is given to key methodological issues, such as the available information, the type of data used, the specification of the variables, the choice of the estimated function, its functional form, and the estimation techniques used, highlighting the issues that require greater attention in future studies. Regarding the results, we focus on the estimated elasticities in order to know how the price of water, the level of activity, and the prices of the other inputs influence the demand for water.

The Perception of Residential Water Tariff, Consumption, and Cost: Evidence of its Determinants Using Survey Data

Laborda

Rodrigo

2022

Water Resour Manage

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In a survey of 1,500 households in Zaragoza (Spain), we found that respondents did not accurately know what the price of water was, and what the characteristics of the water tariff were, how much water they consumed, or how much it cost them; they thought they consumed less water than they actually did, and thought that their consumption level was normal; they believed they paid more than they really did, and considered the payments to be appropriate or expensive. Based on this sample of households, this paper analyses what determines the level of accuracy in the perception of consumers about their water tariff, their water consumption, and their total water cost, or, in other words, what determines the closeness between their perception and reality. The methodology applied is based on maximum likelihood estimates using various probit/logit models. The results obtained allow to identify the collectives to whom an information policy should be directed in order to approximate their perceptions closer to the real tariff, consumption and cost of water in households, and to point out the kind of information that should be transmitted in order to contribute to the preservation of water resources.