Urban water demand for industrial uses in Spain

ABSTRACT

This study estimates the demand for urban water in Spanish industry, with particular attention to differences between sectors. A panel dataset for the Spanish Autonomous Communities in the period 1993–2013, broken down into 11 sectors, was used. The results indicate that water pricing policy can be used effectively as a mechanism to encourage reduced water use (elasticity of −0.66), but there is a strong sectoral heterogeneity that recommends the additional use of other types of instruments. In general, sectors where water represents a larger proportion of total costs present greater elasticity.

KEYWORDS:

• Water demand
• Spanish industry
• demand elasticity
• sectoral heterogeneity
• panel data

Acknowledgements

The authors are grateful for the financial support of the Government of Aragón and the European Regional Development Fund, through the research groups “Public Economics” (project number S23_17R) and “GAEC” (project number S37_17R).

Disclosure statement

No potential conflict of interest was reported by the authors.

Additional information

Funding

This work was supported by the Government of Aragón and the European Regional Development Fund [Research groups “Public Economics” (project number S23_17R), and “GAEC” (project number S37_17R)].