On the Relationship between Water Withdrawal and Income: Smooth Transition Regression (STR) Approach
Mohsen Mehrara, Abdolnaser Hemati, Ali Sayehmiri
DOI: 10.4236/me.2011.25081   PDF   HTML     4,418 Downloads   7,584 Views   Citations


The Purpose of this paper is to investigate the relationship between annual water withdrawal (AWW) and income in some countries. To achieve this end, a smooth transition regression (STR) model on cross section data of 163 countries in 2006 was used. The findings support the nonlinearity of the link between AWW and income. The findings, further, reveal the income elasticity of AWW as a bible-shaped curve. Hence, the policies and management processes in water sector including water allocation between activities and reigns should take into account the development degree and also focus on income level, water scarcity and the economic, social and ecological structure in each country.

Share and Cite:

M. Mehrara, A. Hemati and A. Sayehmiri, "On the Relationship between Water Withdrawal and Income: Smooth Transition Regression (STR) Approach," Modern Economy, Vol. 2 No. 5, 2011, pp. 729-734. doi: 10.4236/me.2011.25081.

Conflicts of Interest

The authors declare no conflicts of interest.


[1] [1] P. H. Gleick and M. Palaniappan, “Peak Water Limits to Freshwater Withdrawal and Use,” Proceedings of the National Academy of Sciences, Vol. 107, No. 25, 2010, pp. 11155-11162. doi:10.1073/pnas.1004812107
[2] K. B. Arrow, R. Bolin, P. Costanza, G. M. Grossman and A. B. Krueger, “Economic Growth and the Environ- ment,” Quarterly Journal of Economics, Vol. 110, No. 2 1995, pp. 353-377. doi:10.2307/2118443
[3] S. Dinda, “Environmental Kuznets Curve Hypothesis: A Survey,” Ecological Economics, Vol. 49, No. 4, 2004, pp. 431- 455. doi:10.1016/j.ecolecon.2004.02.011
[4] A. Camas, P. Ferrao and P. Conceicao, “A New Environ- mental Kuznets Curve? Relationship between Direct Ma- terial Input and Income Per Capita: Evidence from Indus- trialized Countries,” Ecologic Economics, Vol. 46, No. 2, 2003, pp. 217-229. doi:10.1016/S0921-8009(03)00123-X
[5] M. A. Cole, “Trade, the Pollution Haven Hypothesis and Environmental Kuznets Curve: Examining the Linkages,” Ecological Economics, Vol. 48, No. 1, 2004, pp. 71-81. doi:10.1016/j.ecolecon.2003.09.007
[6] B. Barbier, “Introduction to the Environmental Kuznets Curve Special Issue,” Environmental Development Eco- nomics, Vol. 24, 1997, pp. 369-381.
[7] D. I. Stern, M. S. Common and E. B. Barbier, “Economic Growth and Environmental Degradation: The Environ- mental Kuznets Curve and Sustainable Development,” World Development, Vol. 24, No. 7, 1996, pp. 1151-1160. doi:10.1016/0305-750X(96)00032-0
[8] A. Y. Hoekstra, A. K. Chapagain, M. M. Aldaya and M. M. Mekonnen, “Water Footprint Manual: State of the Art,” Water Footprint Network, 2009.
[9] A. Y. Hoekstra and A. K. Chapagain, “Water Footprints of Nations: Water Use by People as a Function of Their Consumption Pattern,” Water Resources Management, Vol. 21, No. 1, 2007, pp. 35-48. doi:10.1007/s11269-006-9039-x
[10] M. T. Tock, “Freshwater Use, Freshwater Scarcity, and Socioeconomic Development,” Journal of Environment and Development, Vol. 7, No. 3, 1998, pp. 278-301. doi:10.1177/107049659800700304
[11] M. T. Tock, “The Dewatering of Economic Growth What Accounts for the Declining Water-Use Intensity of In- come?” Journal of Industrial Ecology, Vol. 4, No. 1, 2001, pp. 57-73.
[12] I. A. Shiklomanov, “Appraisal and Assessment of World Water Resources,” Water International, Vol. 25, No. 1, 2000, pp. 11-32. doi:10.1080/02508060008686794
[13] N. Shafik and S. Bandyopadhyay, “Economic Growth and Environmental Quality: Time Series and Cross- Country Evidence,” The World Bank, Washington, DC, 1992.
[14] K. E. E. Martinez, J. C. Crenshaw and G. M. Jenkins. “Deforestation and the Environmental Kuznets Curve: A Cross-National Investigation of Intervening Mecha- nisms,” Social Science Quarterly, Vol. 83, No. 1, 2002, pp. 226-243. doi:10.1111/1540-6237.00080
[15] R. J. Culas, “Deforestation and the Environmental Kuznets Curve: An Institutional Perspective,” Ecological Eco- nomics, Vol. 61, No. 2-3, 2007, pp. 429-437. doi:10.1016/j.ecolecon.2006.03.014
[16] R. E. Quant, “The Estimation of Parameters of a Linear Regression System Obeying Two Separate Regimes,” Journal of the American Statistical Association, Vol. 53, 1958, pp. 873-880. doi:10.2307/2281957
[17] D. W. Bacon and D. G. Watts, “Estimating the Transition between Two Intersecting Straight Lines,” Biometrika, Vol. 58, No. 3, 1971, pp. 525-534. doi:10.1093/biomet/58.3.525
[18] S. M. Goldfield and R. Quant, “Nonlinear Methods in Econometrics,” North-Holland, Amsterdam, 1972.
[19] D. S. Maddala, “Econometrics,” McGraw-Hill, New York, 1977.
[20] C. W. Granger and T. Terasvirta, “Modeling Nonlinear Economic Relationships,” Oxford University Press, Oxford, 1993, Oxford.
[21] T. Terasvirta, “Specification, Estimation and Evaluation of Smooth Transition Autoregressive Models,” Journal of the American Statistical Association, Vol. 89, 1994, pp. 208-218. doi:10.2307/2291217
[22] T. Terasvirta, “Modeling Economic Relationships with Smooth Transition Regressions,” Handbook of Applied Economic Statistics, Dekker, New York, 1998, pp. 507- 552.
[23] P. H. Franses and D. Vandijk, “Non-Linear Time Series Models in Empirical Finance,” Cambridge University Press, Cambridge, 2000. doi:10.1017/CBO9780511754067
[24] D. A. Dickey and W. A. Fuller, “Estimators for Autore- gressive Time Series with a Unit Root,” Journal of the American Statistical Association, Vol. 74, 1979, pp. 427- 431. doi:10.2307/2286348
[25] K. S. Chan and H. Tong, “On Estimating Thresholds in Autoregressive Models,” Journal of Time Series Analysis, Vol. 7, No. 3, 1986, pp. 178-190. doi:10.1111/j.1467-9892.1986.tb00501.x
[26] Food and Agriculture Organization (FAO) of the United Nations, “AQUASTAT Online Database,” 2006.
[27] World Bank, “World Development Indicators Online Database,” 2007.
[28] A. Gonzalez, T. Terasvirta and D. Van Dijk, “Panel Smooth Transition Regression Model,” Working Paper Series in Economics and Finance, No. 604, 2005.
[29] E. B. Barbier, “Water and Economic Growth,” Economic Record, Vol. 80, No. 248, 2004, pp. 1-16. doi:10.1111/j.1475-4932.2004.00121.x

Copyright © 2023 by authors and Scientific Research Publishing Inc.

Creative Commons License

This work and the related PDF file are licensed under a Creative Commons Attribution 4.0 International License.