Water Technology in the Paper Industry in the Valley of Mexican Basin

Abstract

This article identifies the technological characteristics of the paper manufacturing industry in the Valley of Mexican Basin (VMB)—a densely populated region characterized by absolute water scarcity—in order to quantify the intensity with which water is used. The method consisted of modeling the paper industry’s technology estimating Cobb-Douglas production functions at two moments in time. The comparison of both functions makes it possible to identify water saving technologies during this period, and to evaluate whether the industry has made adjustments to deal with water restrictions. The data is obtained from the Economic Censuses of the National Institute of Statistics Geography and Informatics 2009 and 2014. While our work must be considered preliminary owing to the somewhat irregular nature of the data, certain clear conclusions do stand out. The paper industry located in the VMB has drastically reduced its water usage during the period of time analyzed. This is explained by the adoption of water saving technologies in the industry. In the process, an increase in capital is the main variable to explain such a technical change. This is expressed in the manner in which water and capital inputs appear to be highly suitable substitutes in paper manufacturing.