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Intergovernorate disparities in residential water demand in Tunisia: a discrete/continuous choice approach

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This paper investigates the demand function for residential water in Tunisia, using the discrete/continuous choice model. The analysis uses data for all Tunisian governorates. The main empirical results suggest that water demand is both price and income inelastic, but with high elasticity values (in an absolute sense) estimated for the non-coastal governorates compared to the coastal governorates. Overall, one may argue that combined pricing and non-pricing policies should be implemented in order to save water resources. However, some disparities between Tunisian governorates should be taken into account when applying these policies in order to reach social equity in water consumption.
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Keywords: Tunisia; discrete/continuous choice model; fixed effects vector decomposition (FEVD); increasing block tariff; residential water demand

Document Type: Research Article

Affiliations: Faculty of Economic Sciences and Management of Sousse, University of Sousse, Tunisia

Publication date: October 1, 2013

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