The economics of water sustainability management for agriculture in Italy

Abstract

This PhD Thesis is a collection of four empirical essays on water economics on Italy. The main focus of the research is sustainable water innovation adoption and water conservation policies using panel data econometric analysis. The first paper “What are the factors driving the adoption and intensity of sustainable irrigation technologies in Italy?” authored with Prof. Sabrina Auci and Prof. Massimiliano Mazzanti analyses the main determinants of the intensity of WCST adoption at national level using farm panel data analysis combining binary choice and tobit models, to identify the main factors which could be used by policymakers to boost a sustainable transition through a wide use of WCST. The second paper “Innovation in Irrigation Technologies for Sustainable Agriculture: An Endogenous Switching Analysis on Italian Farms’ Land Productivity” written with Prof. Sabrina Auci is a novel application of the endogenous switching regression model, with the objective of considering differences in productive outcomes due to the adoption of WCST avoiding selection biases. This study analysis whether the gains in productive terms induced by the use of WCST could furtherly induce adoption of sustainable technologies considering it as a win-win solution for both famers and policymakers, as they result in higher profits and water saving at the same time. The third paper “Water Demand Elasticity in agriculture: the case of Emilia Centrale Irrigation Water Districts” authored with Prof. Julio Berbel analyses the elasticity of farmers’ water demand as a proxy of reactivity to water consumption to prices. The topic is widely debated in the literature and this contribution can be important as our analysis offers an application on different crops, technologies, and combinations of them with interesting empirical results. The fourth paper “The impact of volumetric water tariffs in the irrigated agriculture in Northern Italy” authored with Prof. Julio Berbel studies the effect of the introduction of a volumetric tariff on farmers, analyzing their change in water consumption. This study uses a novel application of the difference in differences method, adapting it to the empirical situation under analysis. The results of the study provide evidence of the effectiveness of water tariffs linked to the amount of farmers’ consumption even with small amount of charges. This empirical application demonstrates that famers react to water prices changing from a free public good behaviour to a private commodity inserting water in their cost functions.