Water demand in the Chilean manufacturing industry: Analysis of the economic value of water and demand elasticities

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dc.contributor.authorVasquez-Lavin, Felipe
dc.contributor.authorVargas O, Leonardo
dc.contributor.authorHernandez, Jose, I
dc.contributor.authorPonce Oliva, Roberto D.
dc.date.accessioned2025-01-23T19:46:44Z
dc.date.available2025-01-23T19:46:44Z
dc.date.issued2020
dc.description.abstractIn this article, we estimate both the economic value of water and own-price and cross-price elasticities of water for the Chilean manufacturing industry using the production function approach. Estimating the production function allows us to estimate the marginal productivity of water which corresponds to its economic value. Our estimations are based on panel data obtained from the National Industrial Survey for the period 1995-2014, accounting for more than 10,000 industrial plants. We use a translog specification for the production function, considering water, capital, labor, energy, and intermediate material as explanatory variables. We find substitution patterns among most inputs, except for energy and water, which are found to be complements. Our results suggest that the manufacturing sector is characterized by an elastic water demand, with an average economic value of water of 8.071 [USD/m(3)]. Based on our findings, there is room to increase water prices in most sectors without affecting the competitiveness of firms. Knowing the economic value of water and its price elasticity could help policymakers to design water policies that promote more efficient use of this scarce resource.
dc.fuente.origenWOS
dc.identifier.doi10.1016/j.wre.2020.100159
dc.identifier.issn2212-4284
dc.identifier.urihttps://doi.org/10.1016/j.wre.2020.100159
dc.identifier.urihttps://repositorio.uc.cl/handle/11534/100313
dc.identifier.wosidWOS:000594332500004
dc.language.isoen
dc.revistaWater resources and economics
dc.rightsacceso restringido
dc.subjectEconomic value of water
dc.subjectWater price elasticity
dc.subjectWater productivity
dc.subjectIndustrial water demand
dc.subject.ods06 Clean Water and Sanitation
dc.subject.odspa06 Agua limpia y saneamiento
dc.titleWater demand in the Chilean manufacturing industry: Analysis of the economic value of water and demand elasticities
dc.typeartículo
dc.volumen32
sipa.indexWOS
sipa.trazabilidadWOS;2025-01-12
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