Dual effects of technology change: how does water technological progress affect China's water consumption?
Description
Technological progress is closely related to water consumption. Most studies have emphasized technological progress with the intensity effect in reducing water consumption but ignored its scale effect on economic growth, which leads to an increase in water consumption. In order to clarify the trade-off of technology progress, we combine the Cobb-Douglas (C-D) production function with the Kaya identity and further uses the Logarithmic Mean Divisia Index (LMDI) method to estimate the Solow residual value effect, the industrial water intensity effect, the capital input effect, the labor input effect, the industrial structure effect, the water technology input effect and total water consumption change of different provinces from 2003 to 2020. The basic data we used in the LMDI model is shown below.