SECTORIAL ANALYSIS OF WATER FEES AND USE IN TULANCINGO, HIDALGO, MEXICO

Abstract

Water is an important element for the development of productive activities, though its scarcity will make it more difficult to supply the growing demand of different consumer sectors. The aim of this article was to analyze the water demand of the household, commercial, industrial, agricultural irrigation, and livestock sectors using economic instruments such as water and electricity fees in order to reduce water consumption and achieve rational resource use. A double-log multiple linear regression model was estimated to analyze water demand in the aforementioned sectors using annual data from the municipality of Tulancingo in Hidalgo, Mexico, from 2005 to 2023. The results indicate that, in order to reduce water use by 30 %, the water fee in the household, commercial, and industrial sectors should increase by 54.6, 11.1, and 12.8 %, respectively, whereas to achieve the same reduction in electricity use, the fee in the household, commercial, industrial, agricultural, and livestock sectors must increase by 93.5, 75.4, 35.1, 229, and 71.6 %, indicating that the commercial and industrial sectors are more sensitive to water fees and that the commercial, industrial, and livestock sectors are more sensitive to electricity fees. It is feasible to implement increases in water and electricity fees to reduce water use, particularly in the commercial and industrial sectors.