Explaining the Relationship Between Income and Water Consumption Using Smooth Transition Regression Based on Kuznets’ Environmental Theory

Water plays an important role in the level and growth of economic activities, social welfare and environmental sustainability. the main purpose of this article is to study the non-linear effects of per capita income on water withdrawal in the domestic sector (drinking and urban) of the world. for this purpose, “the environmental kuznets curve (ekc) hypothesis based on the natural resources” has been tested using cross-sectional data, ordinary regression and smooth transition regression (str) from 163 countries. the result is to accept the hypothesis in water economics. furthermore, the “transition point” of the relationship between income and water consumption in gross domestic product (gdp) is $ 41,982. the effect of national income on water consumption in the domestic sector is non-linear, which can be caused by the scale, technology or composition effects. as a result, the stricter environmental regulations can reduce per capita water withdrawals and the rate of aquifer erosions. indeed, increasing per capita income and changing societal structures will reduce per capita water use.