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Water demand under alternative price structures

Author: Sheila M Olmstead; W Michael Hanemann; R N Stavins; National Bureau of Economic Research.
Publisher: Cambridge, Mass. : National Bureau of Economic Research, 2007.
Series: Working paper series (National Bureau of Economic Research), no. 13573.
Edition/Format:   eBook : Document : EnglishView all editions and formats
Database:WorldCat
Summary:
We estimate the price elasticity of water demand with household-level data, structurally modeling the piecewise-linear budget constraints imposed by increasing-block pricing. We develop a mathematical expression for the unconditional price elasticity of demand under increasing-block prices and compare conditional and unconditional elasticities analytically and empirically. We test the hypothesis that price  Read more...
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Material Type: Document, Internet resource
Document Type: Internet Resource, Computer File
All Authors / Contributors: Sheila M Olmstead; W Michael Hanemann; R N Stavins; National Bureau of Economic Research.
OCLC Number: 180704820
Description: 1 online resource (1 v.)
Series Title: Working paper series (National Bureau of Economic Research), no. 13573.
Responsibility: Sheila Olmstead, W. Michael Hanemann, Robert N. Stavins.

Abstract:

We estimate the price elasticity of water demand with household-level data, structurally modeling the piecewise-linear budget constraints imposed by increasing-block pricing. We develop a mathematical expression for the unconditional price elasticity of demand under increasing-block prices and compare conditional and unconditional elasticities analytically and empirically. We test the hypothesis that price elasticity may depend on price structure, beyond technical differences in elasticity concepts. Due to the possibility of endogenous utility price structure choice, observed differences in elasticity across price structures may be due either to a behavioral response to price structure, or to underlying heterogeneity among water utility service areas.

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