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Industrial Water Use in Mexico: Analysis of Efficiencies Using Water Price Elasticity

  • Hilda R. Guerrero García Rojas
  • Faustino Gomez-Santiz
  • Erandi Maldonado-Villalpando
Chapter
Part of the Global Issues in Water Policy book series (GLOB, volume 20)

Abstract

Efficient use of water in Mexico is determined by a tariff structure, which is defined according to the type of user and a categorized classification of water availability zones which arises from the scarcity principle, assuming that the water policy for an efficient water use in Mexico follows the economic principle of supply and demand. In this chapter an analysis of changes in water demand for the industrial sector is performed by hydrological regions in relation to variations in tariff structure. Analyzed data take into account a 14-year period where irregular changes can be seen both in tariff and in demand for water in hydrological regions. According to the result of the price elasticity of demand, there is no direct relationship between an increase in tariff and water demand. This implies that, if there is an efficient water use policy, at least with analyzed data, both the pricing by availability zones and the tariff structure by type of user do not behave as an adequate economic instrument, given that there is a significant variation between applying an increase to the water tariff and the expected response of its demand.

Keywords

Industrial water use Water price elasticity Water availability zone Efficiency analysis Water consumption in the industry 

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Copyright information

© Springer International Publishing AG, part of Springer Nature 2019

Authors and Affiliations

  • Hilda R. Guerrero García Rojas
    • 1
  • Faustino Gomez-Santiz
    • 2
  • Erandi Maldonado-Villalpando
    • 1
  1. 1.Facultad de EconomíaUniversidad Michoacana de San Nicolas de Hidalgo (UMSNH)MoreliaMexico
  2. 2.Independent ConsultantMoreliaMexico

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