Determinants of urban residential water demand in Libya

This paper analyses the effect of several economic, environmental and social determinants for the per capita demand for water in Libya. In this study, the econometric model based on E-views method, instrumental and ARDL model are applied. The cointegration analysis has shown a significant positive effect of temperature on water demand over the short and long term. Also, there is a positive relationship between rainfall and water demand in the long term and its less impact in the short term. There is a significant positive relationship between urban population and water demand. On the other hand, there is a significant negative effect of income on water demand. Therefore, water demand is inflexible to changes in income. The study demonstrated that there is a negative effect on water price in relation to water demand. The estimated long-term variable of water value is 220.98.