LAUSR

Due to the limitation of total amount of water resources, it is necessary to enhance water consumption efficiency to meet the increasing water demand of urbanizing China. Based on the panel data of 31 provinces in China in 1997–2013, we analyze the influencing factors of water consumption efficiency by spatial econometric models. Results show that, 1) Due to the notable spatial autocorrelation characteristics of water consumption efficiency among different provinces in China, general panel data regression model which previous studies often used may be improper to reveal its influencing factors. However, spatial Durbin model may best estimate their relationship. 2) Water consumption efficiency of a certain province may be influenced not only by its socio-economic and eco-environmental indicators, but also by water consumption efficiency in its neighboring provinces. Moreover, it may be influenced by the neighboring provinces’ socio-economic and eco-environmental indicators. 3) For the macro average case of the 31 provinces in China, if water consumption efficiency in neighboring provinces increased 1%, water consumption efficiency of the local province would increase 0.34%. 4) Among the ten specific indicators we selected, per capita GDP and urbanization level of itself and its neighboring provinces have the most prominent positive effects on water consumption efficiency, and the indirect effects of neighboring provinces are much larger. Therefore, the spatial spillover effects of the economic development level and urbanization level are the primary influencing factors for improving China’s water consumption efficiency. 5) Policy implications indicate that, to improve water consumption efficiency, each province should properly consider potential influences caused by its neighboring provinces, especially needs to enhance the economic cooperation and urbanization interaction with neighboring provinces.