Behavioural Science ︱ Dr Yiming He The causal effect of urbanisation on metropolitan water consumption: Theoretic model and evidence from Guangzhou, China The ancient Li Wan area of Guangzhou city. Water treatment plant in Guangzhou. There is an emerging body he literature on water, discussed definitions of water use, of research on the relationship urbanisation and economic the history of water use around the between water and urbanisation. T growth is disjointed. Studies world, problems with collecting and However, there are few studies which have explored the relationship analysing water use data as well as ways that examine the relationship between water consumption and to improve water use efficiency and between water, urbanisation economic growth have largely ignored productivity in different regions and and economic growth. Dr the effect of urbanisation. Studies economic sectors. Such research found Yiming He from South China focused on water consumption and no discernible relationship between Agriculture University aimed urbanisation refer to the link between water withdrawals and income. to address this gap in the the two but not the influence of literature by investigating economic performance on this Other research has developed a growth the impact of urbanisation relationship. Dr Yiming He sought to model which conceptualises water as a and economic performance link these two areas of the literature by productive input for private producers. on water consumption exploring the interactional relationship Water is defined as a congestible non- Bridge across the Pearl River in metropolitan Guangzhou. Xinfengjiang dam in Guangzhou. in Guangzhou, China. between urbanisation, economic excludable good. Congestible goods performance and water consumption are those that act like public goods using aggregated annual data. when scarce and like common resources use to capital productivity. This creates these factors in Spain was conducted in agricultural crops. Research on other when in abundance. Non-excludable an inverted-U relationship between between 1980 (the beginning of the areas, such as Sub-Saharan African EXISTING RESEARCH means that one person having access economic growth and the rate of water democratic era) and 2007 (the onset of countries, has suggested that economic ON WATER CONSUMPTION to the good does not prevent others utilisation. Cross-country estimations the current economic crisis). Researchers growth is driven mainly by water and AND URBANISATION from using it. In this model, growth is have confirmed this labour. In these areas, There is relatively little research on negatively affected by the government’s relationship. This capital and energy have the relationship between water appropriation of output to supply suggests that for These results suggest that studies not been found to be consumption and urbanisation. water but is positively influenced by most economies, the significant in influencing Previous studies have the contribution of increased water current rates of fresh proposing evidence of a widespread economic growth. water utilisation are not yet constraining global water crisis should be taken Despite research growth. However, with caution. on the topics of in countries where urbanisation, economic water is scarce, there seems to be used structural decomposition analysis, performance and water consumption, it little evidence that there are severe which can determine the degree is unclear exactly how these are related. diminishing returns from allocating more to which changes in certain factors Studies have tended to explore water output to provide water, which would contribute to changes in a specific consumption and urbanisation or water lead to falling income per capita. These variable. The method uses an input consumption and economic growth. results suggest that studies proposing and output table and is able to exclude Dr Yiming He thus aimed to add to the evidence of a widespread global water indirect effects from the analysis. literature by exploring the relationship crisis should be taken with caution. From their analysis, researchers found between urbanisation, economic that the growth in Spanish demand performance and water consumption Some studies have explored how would have suggested an increase in Guangzhou, China. Specifically, technology, processes of input in water consumption almost three he sought to investigate the effect of substitution and changes in final times higher than the rate actually urbanisation and economic performance demand (all of which underlie economic observed. However, this demand effect on metropolitan water consumption growth) influence water consumption. was largely offset by technology and using aggregated annual data from 1949 An analysis of the relationship between intensity effects, mainly due to changes to 2014. www.researchfeatures.com www.researchfeatures.com Behind the Research Dr Yiming He E: [email protected] T: (001)3049198579 W: http://english.scau.edu.cn/ W: http://nsaid.scau.edu.cn/2018/0705/c2332a91024/page.htm A Guangzhou ferry-bus on the Pearl River. W: http://nsaid.scau.edu.cn/2018/0705/c2152a91015/page.htm Research Objectives Dr He’s work examines the effect of urbanisation and economic performance on metropolitan water consumption in Guangzhou, China. Detail Dr Yiming He, Program of the national youth talent Researcher and The University of Texas 777 Chestnut Ridge Road, support project, national natural Visiting Professor. Apt 104, science twice, national social science Traditional riverside meets modern Guangzhou. Nanzhou Water Station in Guanghzou City. WV, zipcode:26505 three times, and China Scholarship Funding U.S. Council visiting scholar program. He This work was supported by National Ten has published more than eighty papers Thousand Outstanding Young Scholar A FOCUS ON GUANGZHOU, CHINA Bio on Man and the Economy and Energy Program (Grant Number: W02070352) Dr Yiming He used two economic Despite research on the topics Dr He is a South China Agriculture Economics. Dr Yiming He is also the as well as Key Project of National Natural models to generate hypotheses University PhD, Professor and PhD Ronald Coase Institute Young Fellow, Science Foundation in China, (Grant about the relationships between of urbanisation, economic performance Advisor, who won the Ten Thousand Hong Kong Baptism University Adjunct Number: 71742003). urbanisation, economic performance and water consumption, it is unclear and metropolitan water consumption References Personal Response in Guangzhou, China. Guangzhou, exactly how these are related. also known as Canton, is the capital Gao, S., & He, Y. (2017). The Effect of Urbanization and and most highly populated province of performance on water consumption performance and urbanisation were both Economic Performance on Metropolitan Water Consumption: Do you expect that similar findings about urbanisation, Guangdong in southern China. The first in Guangzhou. The second hypothesis positively related to water consumption Theoretic Model and Evidence from Guangzhou of China. economic performance and water consumption would be found in other areas? economic model used in the research is that there is a positive effect of in Guangzhou over the long term. This Applied Economics and Finance, 4(2), 163-171. was a social optimal model which urbanisation on water consumption suggests that metropolitan economic In terms of urbanisation in Guangzhou, migrants could proposes that as water is used by most in Guangzhou. To test these hypotheses, performance and urbanisation play a key obtain the hukou (permanent resident license) through purchasing a house. This policy resulted in more population industries, when production increases Dr Yiming He used time series data (data role in increasing water consumption migrating to Guangzhou and increasing the urbanisation so does water consumption, and this is which is presented in time order) about in the area. Both hypotheses were speed. Therefore, the amount of water consumption relative to income being generated. This water consumption, urbanisation and therefore supported by these findings. driven by urbanisation would not be similar in other model is based upon dynamic factors economic performance of Guangzhou Analysis also demonstrated that metropolitan areas. because production will continually from 1949 to 2014. Time series data metropolitan economic performance increase or decrease. The second model about GDP, water consumption and does not push up the water used was an individual’s optimal model, urbanisation between 2000 and 2015 consumption immediately but instead which assumes that an individual’s were also used in the analysis. This data has a delayed impact that is visible water consumption is largely based on was obtained from statistical yearbooks four years later. These findings can habit and is only conditional on having produced annually. These hypotheses therefore be used to predict how water access to a tap and a hose, both of were tested using econometric analysis. consumption will be affected by both which are public goods supplied by This involves applying statistical models metropolitan economic performance the government. In contrast to the social to economic data to gain empirical and urbanisation over the long optimal model, this model is based evidence of economic relationships term. This study makes an important upon static factors because access to a between factors. In this study, the contribution to the economic literature tap and