Environmental, Financial, and Social Drivers of Circular Water Management: A Quantile Regression Study in High-Andean Ecosystems

Abstract

This study analyzes the factors influencing the implementation of circular economy practices in the sustainable management of water in Lake Chinchaycocha, located in the central highlands of Peru and exposed to industrial, mining, and agricultural pressures. The analysis focuses on two operational outcomes: water use efficiency (WUE) and compliance with environmental regulations (CER). Data were obtained through a structured questionnaire administered to 50 local stakeholders involved in water governance. Methodologically, quantile regression with bootstrap estimation (τ = 0.25, 0.50, and 0.75) was used to capture the heterogeneity of performance, modeling both outcomes based on environmental impact and conservation (EIC), financial sustainability (FS), and benefits for the local community (BLC). The results show moderate average levels and significant dispersion among units. Quantile estimates reveal asymmetric patterns: financial sustainability is a determining factor at medium efficiency levels, while environmental conservation capacity predominates at high levels. Regarding regulatory compliance, environmental impact and community benefits show positive effects at the extreme quantiles. It is concluded that strengthening the circular economy requires differentiated strategies according to the performance level, integrating environmental, financial, and social dimensions in high-Andean ecosystems.