The economic analysis of industrial water demand: a review

The author reviews economic studies addressing water use with the aim of identifying key empirical questions that are relevant to the estimation of the demand for water. In particular, the effect of price on demand is specified and the way in which the industrial use of water is characterised is explored; this is markedly different from domestic water use. The main conclusion is that more detailed knowledge is necessary to establish the response of industrial firms to changes in the price of water (or taxes), and thus to guarantee the efficient regulation of water resources.