Water Demand Under Alternative Price Structures

Sheila Olmstead, Michael Hanemann () and Robert Stavins

No 13573, NBER Working Papers from National Bureau of Economic Research, Inc

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.

JEL-codes: D12 L95 Q21 Q25 Q28 (search for similar items in EconPapers)
Date: 2007-11
New Economics Papers: this item is included in nep-agr and nep-mic
Note: EEE PE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (162)

Published as Olmstead, Sheila M. & Michael Hanemann, W. & Stavins, Robert N., 2007. "Water demand under alternative price structures," Journal of Environmental Economics and Management, Elsevier, vol. 54(2), pages 181-198, September.

Downloads: (external link)
http://www.nber.org/papers/w13573.pdf (application/pdf)

Related works:
Journal Article: Water demand under alternative price structures (2007)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:13573

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w13573

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().