Economic Determinants of Industrial Water Demand: A Review of the Applied Research Literature

Abstract

This paper surveys the empirical economic literature focused on the determinants of industrial water demand. Both the methodological issues and the outcomes of the previous studies are presented and discussed. Attention is given to key methodological issues, such as the available information, the type of data used, the specification of the variables, the choice of the estimated function, its functional form, and the estimation techniques used, highlighting the issues that require greater attention in future studies. Regarding the results, we focus on the estimated elasticities in order to know how the price of water, the level of activity, and the prices of the other inputs influence the demand for water.