A panel study of water recirculation in manufacturing plants

Figures & data

Table 1. Number of plants that recirculate: 1986, 1991, 1996. Y = Yes, N = No.

Recirculation activity		Total		Process*		Cooling
Total plants/year	2725	# that recirculate	Share of plants	# that recirculate	Share of plants	# that recirculate	Share of plants
1986 survey		1957	0.72	1356	0.50	1811	0.66
1991 survey		1413	0.52	820	0.30	1262	0.46
1996 survey		1638	0.60	1062	0.39	1464	0.54
No change in status		1126	0.413	1039	0.381	1025	0.376
Recirculated in all three periods	Y Y Y	857	0.314	310	0.114	660	0.242
Did not recirculate in any period	N N N	269	0.099	729	0.268	365	0.134
Began recirculating		397	0.146	503	0.185	436	0.160
Recirculated in 1991 and 1996 but not in 1986	N Y Y	188	0.069	175	0.064	197	0.072
Recirculated in 1996 only	N N Y	209	0.077	328	0.120	239	0.088
Stopped recirculating		716	0.263	797	0.292	783	0.287
Recirculated in 1986 only	Y N N	450	0.165	599	0.220	491	0.180
Recirculated in 1986 and 1991 but not in 1996	Y Y N	266	0.098	198	0.073	292	0.107
Changed status		486	0.178	386	0.142	481	0.177
Recirculated in 1986 and 1996 but not in 1991	Y N Y	384	0.141	249	0.091	368	0.135
Recirculated in 1991 only	N Y N	102	0.037	137	0.050	113	0.041

^* Process recirculating includes “other recirculating”.

Table 2. Conditional probabilities of recirculating.

	1986 base year	1991 base year	Combined	1986 + 1991 base year
Total recirculation
Condition probability of recirculated in period t + 1 given plant did in period t	0.57	0.74	0.64	0.76
Condition probability of recirculating in period t + 1 if plant did not in period t	0.38	0.45	0.42	0.44
Ratio of probabilities	1.52	1.64	1.52	1.72
Process recycling
Condition probability of recirculating in period t + 1 given plant did in period t	0.37	0.59	0.46	0.61
Condition probability of recirculating in period t + 1 if plant did not in period t	0.23	0.30	0.27	0.31
Ratio of probabilities	1.64	1.95	1.68	1.96
Cooling recycling
Condition probability of recirculating in period t + 1 given plant did in period t	0.53	0.68	0.59	0.69
Condition probability of recirculating in period t +1 if plant did not in period t	0.34	0.41	0.39	0.40

Table 3. Instrumental variable estimates of marginal costs where the dependent variable is the estimated marginal cost derived from the regression equation TC = a₀ + a₁Q + a₂Q². TC (total cost) measures the total reported annual expenditure, and Q (quantity) is the total reported annual volume of water.

	Marginal cost of intake		Marginal cost of recirculation		Marginal cost of discharge
	Estimate	Standard error	Estimate	Standard error	Estimate	Standard error
Constant	–0.0232794	(0.0014794)	0.0120988	(0.0000421)	0.1825571	(0.0009584)
TREATdum	0.0007064	(0.0011985)	–0.0000252	(0.0000341)	–0.0004222	(0.0007764)
Region	0.0004683	(0.0002767)	–6.01e-06	(7.88e-06)	–0.0002884	(0.0001793)
dum86	0.0034971	(0.0009264)	–0.000108	(0.0000264)	–0.0022664	(0.0006002)
dum91	0.0019034	(0.000846)	–0.0000723	(0.0000241)	–0.0011929	(0.000548)
SIC10	–0.0013141	(0.0007315)	0.0000713	(0.0000208)	0.0008085	(0.00047390
SIC16	–0.0012382	(0.0017731)	0.0000516	(0.0000505)	0.0007386	(0.0011487)
SIC18	0.0000221	(0.0019763)	0.0000538	(0.0000563)	–0.0000875	(0.0012803)
SIC27	0.0131126	(0.0012859)	–0.0001371	(0.0000337)	–0.0049533	(0.0007665)
SIC29	0.0131126	(0.0012859)	–0.0002736	(0.0000366)	–0.0082857	(0.000833)
SIC30	–0.0013086	(0.0013186)	0.000066	(0.0000375)	0.0007961	(0.0008543)
SIC32	–0.0010044	(0.0012287)	0.0000617	(0.000035)	0.0006161	(0.000796)
SIC35	–0.00082	(0.0010644)	0.00005	(0.0000303)	0.0004842	(0.0006895)
R2	0.1267		0.0831		0.0792
F	19.31		13.98		17.92

SIC: Standard Industrial Classification code.

Table 4. Descriptive statistics of variables in estimation model.

Variable	Units	Mean	St. dev.^1	Min^2	Max
Scale of production	#workers	198.34	459.94	13	1500
MC^3-intake	$/m^3	0.0384	0.0211	0.002	0.062
MC-recirculation	$/m^3	0.1274	0.0198	0.006	0.217
MC-discharge	$/m^3	0.2396	0.2411	0.0159	0.358
Treatment prior to use		0.6423	0.4790	0	1
Nova Scotia		0.0341	0.1815	0	1
New Brunswick		0.0385	0.1924	0	1
Quebec		0.2384	0.4261	0	1
Ontario		0.4135	0.4925	0	1
Manitoba		0.0380	0.1913	0	1
Saskatchewan		0.0239	0.1529	0	1
Alberta		0.0729	0.2599	0	1
British Columbia		0.1140	0.3178	0	1
Beverage		0.0055	0.0739	0	1
Rubber		0.0285	0.1664	0	1
Plastics		0.0211	0.1439	0	1
Textiles		0.0051	0.0714	0	1
Wood		0.0781	0.2684	0	1
Paper		0.0440	0.2051	0	1
Primary metals		0.0524	0.2230	0	1
Fabricated metals		0.0834	0.2765	0	1
Transportation		0.0790	0.2697	0	1
Minerals		0.1022	0.3030	0	1
Petroleum		0.0080	0.0894	0	1
Chemicals		0.0916	0.2885	0	1
Volume of water recirculated	m^3	2,223,852	1.89e+07	0	4402000
Recirculation rate		3.6954	47.725	0	7.8176

¹ St. dev.: standard deviation.

² The minimum and maximum values for the following variables are reported at the 5% and 95% percentiles in order to preserve confidential of responses: scale of production, volume of water recirculated, and recirculation rate.

³ MC: marginal cost.

Table 5. Two-stage coefficient estimates for recirculation volume. The dependent variable in the decision equation is a binary variable with a value of 1 if the plant recirculates water and 0 otherwise in 1986.

Variable	Decision equation	Standard error	Recirculation volume equation	Standard error
Constant	–2.55e+09	2.32e+09	–0.2893028*	0.1089496
MC-intake	2.94e+11**	1.62e+11
MC-recirculation	–3.43e+11*	1.46e+11
MC-discharge	–1.82e+10**	1.02e+10
Number of workers	13090*	545	0.0001256*	0.0000565
Treatment dummy			1.475931*	0.0349829
1996 dummy	27295	819894	–0.4888256*	0.0344649
SIC10 (food)			–0.167787*	0.0494193
SIC15 (rubber)			0.0890838	0.2575433
SIC16 (plastic)			0.16573	0.1149624
SIC18 (primary textile)			–0.2622304*	0.1164642
SIC19 (textile products)			0.005741	0.2451123
SIC25 (wood)			–0.3530821*	0.071002
SIC27 (paper)			–0.0921502	0.0980839
SIC29 (primary metal)			0.0143288	0.0814031
SIC30 (fab. metal)			–0.2189309*	0.0663837
SIC32 (trans. equip.)			–0.1337754**	0.0695691
SIC35 (minerals)			–0.1144455**	0.0615119
SIC36 (petroleum)			–0.2034461	0.2017814
Nova Scotia			0.3459141*	0.1348769
New Brunswick			0.0432986	0.1272549
Quebec			0.3555532*	0.105737
Ontario			0.2821644*	0.103216
Manitoba			0.3017064*	0.1294429
Saskatchewan			–0.1012715	0.1434234
Alberta			0.5345518*	0.1201144
British Columbia			0.1830715	0.1116779
Mills λ			1807906*	1161100
Wald χ^2(31)	801.87
Probability > χ^2	0.00
Number of observations	8175		5776

MC: marginal cost. SIC: Standard Industrial Classification code.

^* 5% level of significance using robust standard errors.

^** 10% level of significance using robust standard errors.

Table 6. Two-stage coefficient estimates for recirculation intensity. The dependent variable in the decision equation is a binary variable with a value of 1 if the plant recirculates water and 0 otherwise in 1986.

Variable	Decision equation	Standard error	Recirculation equation	Standard error
Constant	–5092478	7963703	–0.2893028*	0.1089496
MC-intake	4.94e+08	5.55e+08
MC-recirculation	–5.16e+08	5.03e+08
MC-discharge	–3.06e+07	3.50e+07
Number of workers	1.978102	1.873804	0.0001256*	0.0000565
Treatment dummy			1.475931*	0.0349829
SIC11 (bev.)			–0.4888256*	0.0344649
SIC15 (rubber)			–0.167787*	0.0494193
SIC16 (plastic)			0.0890838	0.2575433
SIC18 (primary textile)			0.16573	0.1149624
SIC19 (textile products)			–0.2622304*	0.1164642
SIC25 (wood)			0.005741	0.2451123
SIC27 (paper)			–0.3530821*	0.071002
SIC29 (primary metal)			–0.0921502	0.0980839
SIC30 (fab. metal)			0.0143288	0.0814031
SIC32 (trans. equip.)			–0.2189309*	0.0663837
SIC35 (minerals)			–0.1337754**	0.0695691
SIC36 (petroleum)			–0.1144455**	0.0615119
SIC37 (chemicals)			–0.2034461	0.2017814
Nova Scotia			0.3459141*	0.1348769
New Brunswick			0.0432986	0.1272549
Quebec			0.3555532*	0.105737
Ontario			0.2821644*	0.103216
Manitoba			0.3017064*	0.1294429
Saskatchewan			–0.1012715	0.1434234
Alberta			0.5345518*	0.1201144
British Columbia			0.1830715	0.1116779
Mills λ			5863.187	3987.99
Wald χ^2(31)	13.95
Probability > χ^2	0.0159
Number of observations	8175		5776

^* 5% level of significance using robust standard errors.

^** 10% level of significance using robust standard errors.

Table 7. Elasticity estimates (using coefficients from Table 5).

Variable	Recirculation decision	Recirculation volume
MC-intake	NA	0.08
MC-recirculation	NA	–0.24
MC-discharge	NA	–0.31
Number of workers	0.05	1.04
Intake treatment	0.64	NA

NA: not available. MC: marginal cost.