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Households consumption and desertification: an econometric analysis of Sardinian coastal areas.

Congress: 2008
Author(s):

Keyword(s): water demand, water pricing, panel data
AbstractSouthern European regions are characterized by a tourist demand which only in part is addressed to official tourist structures, while the remaining part goes to secondary residences. Given the water scarcity in the Mediterranean, it is important to measure the impact on domestic water resources and infrastructures due to the large presence of tourists in secondary residences in marine towns in the summer. In our knowledge, no previous work has dealt with this specific problem. This paper focuses on the domestic demand of water and estimates the effect that the tourist presence in secondary residences has on the final consumption of water in the domestic sector. This analysis is particularly important in coastal areas when desertification process is in progress due to bad land use practices and an excessive domestic and economic pressure on water resources and ecosystems. A panel of 240 Sardinian towns in a 4-years period is analyzed to identify the determinants of residential water demand. Panel data techniques are employed to estimate the effect on the domestic water demand of standard economic and structural variables, such as price, income and household size, which are all found significant, in line with previous literature results. The present work has some other interesting elements with respect to the existing literature on water demand, such as: a large cross-section dataset; different price structures in the period under analysis; use of a weather variable, the aridity index, which is more informative than other variables used in previous studies; and a period including years of drought with the imposition of quantitative water rationing measures. The effect of weather and the impact of quantity restrictions are also an important output of our analysis.
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