 Price and Non-Price Influences on Water Conservation: An Econometric Model of Aggregate Demand under Nonlinear Budget ConstraintLeonardo Corral, Anthony C. Fisher and Nile W. Hatch No 7155, CUDARE Working Papers from University of California, Berkeley, Department of Agricultural and Resource Economics Abstract: This paper develops a model of residential water demand under a nonlinear budget constraint. The theoretical model for an individual consumer is adapted to yield an aggregate model that preserves the structure of the individual demand function, and that can be used with aggregate (water district level) data. The model is used to study the influence of pricing and non-price conservation programs on consumption and conservation behavior in three water districts in the San Francisco Bay Area, over a 10-year period that includes both drought and normal years. Empirical results show that pricing can be effective in reducing water consumption, particularly during the annual dry season, and during longer drought episodes. The effect is mitigated when non-price conservation programs are included in the analysis. Among these, use restrictions and landscaping audits appear to be particularly effective in inducing conservation. Keywords: Demand and Price Analysis; Resource/Energy Economics and Policy (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ags:ucbecw:7155 Access Statistics for this paper More papers in CUDARE Working Papers from University of California, Berkeley, Department of Agricultural and Resource Economics Contact information at EDIRC. |
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