Modeling Water Productivity Within the Framework of Sustainability: Estimation of FMOLS, DOLS, and CCR Methods

In this study, Luxembourg, the Maldives, and Singapore, which have high water productivity, and Afghanistan, Madagascar, and Kyrgyzstan, which have low water productivity, were comparatively examined and analyzed. This study aimed to analyze long-run water productivity using the FMOLS, DOLS, and CCR models. While a 1% increase in freshwater resources per capita in Luxembourg increased water productivity by 0.14%, it decreased it by 0.90% in Singapore. These opposing effects may arise from differences in water management structures, water access patterns, policy priorities, and national infrastructure. On the other hand, while water productivity in Luxembourg reflects a more conscious policy choice, it can be stated that water productivity is largely implemented as a necessity in Singapore. In the models for the Maldives, Madagascar, and Kyrgyzstan, the water resources variable was not found to be statistically significant. Although the coefficient of this variable is statistically significant for Afghanistan, its value is quite low, and it does not show a significant effect on water productivity. The increase in water withdrawal reduces water productivity by 63.22%, 30.11%, and 1.33% in Luxembourg, the Maldives, and Singapore, respectively. In all country models, GDP per capita was statistically significant, but the coefficients were low. The direct effect of economic growth on water efficiency was limited.