Residential Water Demand in China: Applications of Double-Log Model and EDM System

This study undertook the residential water demand analysis based on a panel data covered 31 provinces of China during the sample period from 2004 to 2013. Two models are employed in this study: Double-Log model and EDM model. The estimates of double-log model show that the different levels of income cannot impact the water price elasticities significantly but the fixed effects estimator gives a more appropriate estimate for the water demand system. In addition, both the water price and the income are inelastic. However, with the EDM model estimations, the results reveal that the water price is elastic for the residential water demand in the short run, and the partial price-supply elasticity is negative due to estimates of total elasticities. Both two models gave the result that the residential water is an inferior good in China.

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Conference Paper/ Presentation
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JEL Codes:
C13 C23 Q25

 Record created 2017-04-01, last modified 2018-01-23

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