Water Supply Vol 5 No 6 pp 85–93 © IWA Publishing 2005
Economic analysis of domestic, industrial and agricultural water demands in China
Y. Zhou* and R.S.J. Tol**
*International Max Planck Research School of Earth Systems Modelling, Hamburg, Germany, ; Research unit Sustainability and Global Change, Hamburg University and Center for Marine and Atmospheric Science, Hamburg, Germany
**Research unit Sustainability and Global Change, Hamburg University and Center for Marine and Atmospheric Science, Hamburg, Germany, ; Institute for Environmental Studies, Vrije Universiteit, Amsterdam, The Netherlands, ; Engineering and Public Policy, Carnegie Mellon University, Pittsburgh, PA, USA
ABSTRACT
Demand management plays an increasingly important role in dealing with water scarcity in China. It is important to understand the level and pattern of water use in various sectors across the regions for any measures being put into effect. The aim of this study is to enhance the understanding of the factors that influence water demand by examining closely the water use in domestic, industrial and agricultural sectors. Using province level panel data from 1997 to 2003, the examination shows that the regional disparity in the level and pattern of water uses is considerable. The estimation of water demand shows that both economic and climatic variables have significant effects on water demand. The results suggest an income elasticity of 0.42 for the domestic sector, an output elasticity of -0.32 for industrial water use (per unit of output), and an output elasticity of -0.23 for irrigated agriculture (per land area). Keywords Demand management; elasticity; regional variation; water use
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