Piped water supply and usage and the question of services of general interest: a spatial panel data analysis

The services of general interest (SGI) hold an important place in relation to the European model of society, referring to general functions and objectives that are essential for the implementation of fundamental citizen rights and for the accomplishment of economic, social and territorial cohesion goals. SGI reflect the obligation of public authorities to provide them at certain standards in terms of quality, availability, accessibility and affordability. Besides the socio-economic dimension involved in these discussions, which envisages the provision of SGI to everyone, the territorial dimension has to be considered too, as it emphasises the provision of SGI everywhere. In this paper, the inquiry into the piped water consumption differentiates between households and firms. We explored the territorial dimension of this topic by means of various spatial panel models, which account for the spatial effects emerging via cooperation, imitation or cross-country spillovers in neighbour regions. Given the characteristics of the geographic, social and economic factors envisaged in our research, we hypothesised significant spatial influences among counties; therefore, the spatial panel is the appropriate way to avoid misspecification problems related to the estimation and interpretation of the standard (non-spatial) panel data model. It is applied in the specific case of Romania that is highly relevant in terms of availability and accessibility criteria, considering the amplitude of territorial disparities not only between regions but also between urban and rural environments, in a country with more than 43% of its population living in rural areas, still lagging behind when it comes to the basic infrastructure necessary for a decent standard of living.