Household Water Demand Seasonal Elasticities: A Stone-Geary Model under an Increasing Block Rate Structure

Andrew J. Clarke, Bonnie Colby and Gary Thompson ()

Land Economics, 2017, vol. 93, issue 4, 608-630

Abstract: Using household-level panel data from Tucson, Arizona, and a unique set of highly disaggregated control variables, we estimate residential demand for water via a Stone-Geary specification. The Stone-Geary functional form allows price elasticity of demand to vary with quantity consumed, price, and income and enables estimation of a threshold level of consumption below which demand is considered perfectly price inelastic. An encompassing test of consumer price response reveals evidence favoring a lagged average price specification rather than one using lagged marginal price. The estimated model also finds substantial seasonal variation in price elasticity and declining consumer price responsiveness.

JEL-codes: C23 Q25 (search for similar items in EconPapers)
Date: 2017
Note: DOI: 10.3368/le.93.4.608
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:uwp:landec:v:93:y:2017:i:4:p:608-630

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