Resumen

GALINDO, Luis Miguel  y  MONTESILLO, José Luis. The Demand for Drinking Water in Mexico: Preliminary Estimates. Inv. Econ [online]. 1999, vol.59, n.227, pp.27-43. ISSN 0185-1667.

The main objective of this paper was to calculate a function of demand for drinking water and its margins of income and price for Mexico. The results obtained indicate that drinking water has an income margin of less than one, and a negative price margin that is highly inelastic and may even equal zero. These results are consistent, in that water is an indispensable commodity of basic necessity. Thus, as income rises the structure of spending is diversified, thereby reducing the proportion spent on the consumption of water. Similarly, the estimated econometric model satisfies the conditions of exogeneity. Nevertheless, to the extent that the demand for water is practically inelastic to movements in relative prices, then the possibilities of using Pigou type taxes to regulate consumption are relatively limited.

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