parametric Estimation of Conditional Water Demand Function in Iran’ s Manufacturing Sector

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SHAHIKI TASH MOHAMMAD NABI; Mousavi Haniye; Khajeh Hasani Rabori Mostafa

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Journal: Journal of Industrial Economic Research Year:2020 | Volume:4 | Issue:11 Page(s): 25-38

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Title

parametric Estimation of Conditional Water Demand Function in Iran’ s Manufacturing Sector

Author(s)

SHAHIKI TASH MOHAMMAD NABI | Mousavi Haniye | Khajeh Hasani Rabori Mostafa | Issue Writer Certificate

Keywords

Function

Water

Industry

Price elasticity

Morishima and Allen elasticity of substitution

Abstract

Water shortage in Iran is one of the main restriction on development of economic activity in the coming decades. The main purpose of this study is to estimate Water demand Function in Iran’ s manufacturing industries using Translog cost Function. Iran’ s manufacturing industries data from 2004 to 2014 is used for this purpose. The results show all the Allen partial elasticities are correctly negative as expected. In other words, the inverse relationship between price and demand quantities is approved. All price elasticities have negative sign as expected and also the Water Price elasticity is greater than the price elasticities of other inputs in absolute value which means the sensitivity of Water demand to price changes is higher than other inputs. Energy, capital and labor ranke 2 nd rd , 3 and fourth in term of Price elasticity. The absolute value of all input price elasticities are smaller than one and therefore the demand for all inputs is inelastic. The valueof all Morishima elasticities are positive which indicate that the inputs are sudstitution. Based on the research findings and especially considering that the Price elasticity of Water input is about one, it seems that pricing policies will not effectively reduce Water demand in manufacturing sector.

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APA: Copy

SHAHIKI TASH, MOHAMMAD NABI, Mousavi, Haniye, & Khajeh Hasani Rabori, Mostafa. (2020). parametric Estimation of Conditional Water Demand Function in Iran’ s Manufacturing Sector. JOURNAL OF INDUSTRIAL ECONOMIC RESEARCHES, 4(11 ), 25-38. SID. https://sid.ir/paper/381282/en

Vancouver: Copy

SHAHIKI TASH MOHAMMAD NABI, Mousavi Haniye, Khajeh Hasani Rabori Mostafa. parametric Estimation of Conditional Water Demand Function in Iran’ s Manufacturing Sector. JOURNAL OF INDUSTRIAL ECONOMIC RESEARCHES[Internet]. 2020;4(11 ):25-38. Available from: https://sid.ir/paper/381282/en

IEEE: Copy

MOHAMMAD NABI SHAHIKI TASH, Haniye Mousavi, and Mostafa Khajeh Hasani Rabori, “parametric Estimation of Conditional Water Demand Function in Iran’ s Manufacturing Sector,” JOURNAL OF INDUSTRIAL ECONOMIC RESEARCHES, vol. 4, no. 11 , pp. 25–38, 2020, [Online]. Available: https://sid.ir/paper/381282/en

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