Estimating the Price Elasticity of Demand for Water with Quasi Experimental Methods

Henry Klaiber, V. Smith, Michael Kaminsky and Aaron Strong

No 61039, 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado from Agricultural and Applied Economics Association

Abstract: There is a growing recognition in both the professional and popular literatures that water scarcity is a key policy issue that is especially important in arid, urban settings with the prospects for shortfalls in water availability due to the effects of climate change. Those evaluating these types of water problems usually conclude prices must be reformed so that incentives facing water users change to reflect this scarcity. Demand functions provide the basic economic relationships required to understand how water use will respond to such changes. This paper proposes a new method for estimating the price elasticity of demand that meets policy needs and can accommodate the presence of increasing block pricing structures.

Keywords: Consumer/Household Economics; Demand and Price Analysis; Environmental Economics and Policy; Resource/Energy Economics and Policy (search for similar items in EconPapers)
Pages: 23
Date: 2010
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea10:61039

DOI: 10.22004/ag.econ.61039

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