A threefold empirical analysis of the relationship between regional income inequality and water equity using Tapio decoupling model, WPAT equation, and the local dissimilarity index: evidence from Bulgaria

Abstract

This study utilizes a threefold empirical analysis in order to examine the relationship between income and water equity in Bulgaria, the fastest shrinking country in the world in terms of population, and the most unequal member of the EU in terms of regional income distribution. First, in line with this goal, the income elasticity of regional water demand in the country is calculated using the Tapio decoupling model. Second, the WPAT equation which measures the weighted impacts of population, per capita income and intensity on water demand, is utilized. And finally, using the local dissimilarity index, spatial differences in access to water by region are measured. Underscoring the essence of regional level analyses based on specific decomposed subgroups, findings are thus compatible with the economic and demographic characteristics of the regions handled in the study. In the northern regions where income and population levels are relatively low, during periods when income and water demand both increase, the rise in water demand is usually higher than the increase in income; conversely, when income decreases, the water demand also falls. The effect of population dominates the changes in water demand in the northern regions, with the exception of the Northwestern Region, where water intensity is the leading factor, possibly because the Balkans’ largest nuclear power plant is located in the region. In the southern regions where income is higher, income has been the most important determinant of water demand, particularly in recent years.