An Estimation of Residential Water Demand Using Co-Integration and Error Correction Techniques

Roberto Martinez-Espineira ()

MPRA Paper from University Library of Munich, Germany

Abstract: In this paper short- and long-run price elasticities of residential water demand are estimated using co-integration and error-correction methods. Unit root tests reveal that water use series and series of other variables affecting use are non-stationary. However, a long-run co-integrating relationship is found in the water demand model, which makes it possible to obtain a partial correction term and to estimate an error correction model. The empirical application uses monthly time-series observations from Seville (Spain). The price-elasticity of demand is estimated as around -0.1 in the short run and -0.5 in the long run. These results are robust to the use of different specifications.

Keywords: seasonal unit roots; residential water demand; price elasticity; time-series; co-integration; Error Correction Model (search for similar items in EconPapers)
JEL-codes: C22 D12 Q25 (search for similar items in EconPapers)
Date: 2005-04, Revised 2006-01
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: An Estimation of Residential Water Demand Using Co-Integration and Error Correction Techniques (2007)
Working Paper: An Estimation of Residential Water Demand Using Co-integration and Error Correction Techniques (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:615

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