Microeconometric Analysis of Residential Water Demand

Cristina Lopez-Mayan

Environmental & Resource Economics, 2014, vol. 59, issue 1, 137-166

Abstract: This paper develops a structural model for obtaining price elasticities and evaluating consumer’s response to changes in nonlinear tariffs when only panel data on household consumption are available. The model and the empirical strategy address problems implied by nonlinear tariffs, existence of a fixed cost, and use of limited data, giving rise to a random effects model with a nonlinear individual effect. Results show that the estimated model does well at fitting data and demand is inelastic, although elasticity varies by initial consumption block. Then, I estimate welfare consequences of implementing several demand policies. Copyright Springer Science+Business Media Dordrecht 2014

Keywords: Household demand; Increasing-block pricing; Indirect inference; Kinked budget constraint; Panel data; Price-elasticity; Utilities; D12; L95; Q21; Q25; Q28 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (4)

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Working Paper: Microeconometric Analysis of Residential Water Demand (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:kap:enreec:v:59:y:2014:i:1:p:137-166

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DOI: 10.1007/s10640-013-9721-4

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