On the Relationship between Water Withdrawal and Income: Smooth Transition Regression (STR) Approach

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.