Presentation on theme: "VANIA STATZU and ELISABETTA STRAZZERA"— Presentation transcript:
1 VANIA STATZU and ELISABETTA STRAZZERA A Panel Data Analysis of Domestic Water Demand in a Mediterranean Tourist Region: the Case of SardiniaVANIA STATZU and ELISABETTA STRAZZERAIn: Economics of Sustainable Tourism (Routledge Critical Studies in Tourism, Business and Management) byFabio Cerina, Anil Markandya , Michael McAleer,
2 Purposes of the Research We need more knowledge of the determinants of residential water demand in order to construct policy tools to improve sustainable consumption. In our work we will assess:Price and income elasticityOther determinants of household water demandThe impact of second houses tourismThe results will be useful for indication to policy-makers and utilities managers
3 Elements of interestUse of aggregated data on domestic water consumptionA large panel data: 240 municipalities for 6 yearsStructural changes such as water rationing measures and a tariff reformNew variables with respect to previous works:The Tourism dummy variableThe Water Rationing variable
4 ContextDifferent price levels and management practices across municipalities until 2004A water reform in 2004 (due to National Law 36/94) introduces a unique water utility and a unique water tariff and priceSardinia is a Mediterranean tourist island characterised by the occurrence of period of water scarcityLast period of severe drought was in
8 ContextHigh seasonal fluctuation in the residential consumption due to the high number of tourists lodged not in official structures but in holiday homes rented during summer monthsTourists stay mainly in coastal areasNo official data on home holidays and on tourist presence at municipal level was available for the period analised
9 Static Panel Models The static model is We compare different approaches:Pooled OLSFixed EffectRandom Effect
10 RESULTS RANDOM EFFECT – GLS INTERCEPT 0.609 AP -0.146*** INCOME 0.163***HHSIZE1.141***NLF-0.281**OWNERS-0.453***NORENOV0.154ALT-0.022**POP50000.639*POPOV150000.449***TOUR20.095**TOUR30.172***TOUR40.250***
11 RANDOM EFFECT – GLSSUMEVATRA0.108**HOURS0.045SIM0.505***SIINOS-0.079GOVOSSAI0.038YEAR 20010.669***YEAR 20020.532***YEAR 20030.558***YEAR 20040.515***YEAR 20050.470***N1440R-squared0.63
13 Comments (1)Water demand is inelastic so there will be a little reaction to an increase of price; water is a normal good so consumption will increase along with incomeIn this model, water rationing measures seem to have no influence on consumption. This is most probably due to the fact that households have adopted defensive measures to contrast the restrictions imposed (storage tanks)Utilities dummies take into account differences in management tools, such as billing frequency or tariff structure, which may influence average consumption.In 2005, consumption increases less than in previous years: possible effect of new tariff, but further data should be necessary.Higher values of this variable imply that the climate is less humid and rainy and it is often associated to higher temperature: these conditions induce to consume more water for watering plants Unfortunately, we do not have direct information on the number (and size) of private gardens in the municipalities
14 Comments (2)The “coastalization” process determines new estate development, and relinquishment of old dwellings in the interior country towns and villages. The building typology in coastal areas differs from that of the interior: in particular it is more common that houses are endowed with lawns and gardens, and this will lead to an increase in the demand of water, especially when the climate is hot and dry.
15 Comments (3)Our results seem to support the idea that the life style leads to increasing water consumption: large households and working force, who are more numerous in coastal and sub-coastal towns, consume more water.Home owners consume less than tenants, probably due to the fact that the latter do not receive correct price signals for their consumption behaviour if, as it often is the case, the rent includes the water bill: there is no incentive to avoid waste and to adopt more efficient technology.
16 Comments (4)This has the effect of spuriously inflating the residential demand of water in the most popular tourist towns: when decisions have to be made about the allocation of water among sectors, this will have undesirable distributive effects, since “unofficial” tourist lodges can take advantage of regulations which in shortage periods favour residential uses of water and penalize other sectors.A very high presence of tourists in secondary homes leads to a significant increase in water consumption per user.
17 Comments (5) Average consumption (in cubic meters) of: Average consumption (in cubic meters) of:no tourist impactlow tourist impactintermediate tourist impacthigh tourist impact2000108.83119.68129.25139.742001111.21122.30132.09142.802002110.63121.66131.39142.052003115.32126.82136.97148.082004117.24128.92139.24150.542005113.33124.63134.60145.52
18 Policy Suggestions (1)Tariff structures and price level are useful to manage demand but non price instrument can also influence consumers’ behaviour.Information campaigns on the benefits of inserting flow reducing devices and on efficient water use, could be helpful to induce a more responsible consumers’ behavior.
19 Policy Suggestions (2)Information and financial incentives should be aimed at encouraging the adoption of good practices in landscaping; and to promote grey water collection and treatment systems in resort condominiums, to be used for irrigation in the residential or in the agricultural sector.This would represent a great improvement in the efficiency of the use of the resource, having the twofold effect of decreasing both the demand of water and the sewage discharge. It is well known that water shortages in coastal areas intensify the use of water wells in agriculture, so aggravating the process of salinization and desertification of coastal land.
20 Water management in Italy : before and after recent referenda VANIA STATZU
21 Water management in Italy Problems:The double role of majors in ATOs and in public utilitiesThe problem of public owned corporations as in house utilitiesThe ATOs abolishmentAbsence of a national authorityAbsence of a coherent legislative framework after 1994National Law 36/1994Water property shift from private to publicWater management at hidrographic basin level: ATOsOne water utility for basinIn house, public owned corporation, public companies and mixed systemsFull Cost Recovery Principle for tariffs
24 After the referendumReferendum stopped the attempt to force public owned corporations to assign shares to public companiesContracts are quite long: no changes in management situation immediatelyAt the moment, situation is quite confusing and Italy required a new water framework law: now municipalities can choose in house utilities but nothing is clear about public owned corporation, mixed situation and private companiesReferendum eliminate the capital cost recovery of 7% imposed by lawInvestments may be stopped without an agreement to keep previous agreement
25 What we need: ATOs or not ATOs: this is the problem! Promote public-private agreements to finance investmentsProject financing ecc.Debate on the role of tariff systemsA national water authorityNational rules on water managementA system of benchmarking to achieve a higher level of efficiencya different roles for municipalities: more power to decide but not a double role