ESTIMAÇÃO DE FUNÇÕES DE DEMANDA RESIDENCIAL DE ÁGUA EM CONTEXTOS DE PREÇOS NÃO LINEARES
José Airton Mendonça de Melo and
Paulo de Melo Jorge Neto
Anais do XXXIII Encontro Nacional de Economia [Proceedings of the 33rd Brazilian Economics Meeting] from ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics]
Abstract:
This paper estimates residential water demand functions taking into account the block rate pricing schedule usually set by water utilities. The progressive pricing, although preserves the convexity property on the budget set, induces the consumer budget constraints be non-linear, what violates the classical assumption of exogeneity of the explanatory variables required by the ordinary least squares method. An important conclusion is that price elasticity of water consumption is closely unitary.
JEL-codes: C31 C53 (search for similar items in EconPapers)
Date: 2005
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