Estimating Urban Residential Water-Demand With Increasing Block Prices: The Case of Perth, Western Australia

Vilaphonh Xayavong, Michael Burton and Ben White

No 6010, 2008 Conference (52nd), February 5-8, 2008, Canberra, Australia from Australian Agricultural and Resource Economics Society

Abstract: This study uses panel data at suburb level to estimates the elasticity water demands in Perth, Australia from 1995 to 2005. After deriving the consumer’s water demand under a non-linear budget constraint, we estimate the water demand model, which accounts for how water (and other purchased goods) is used to satisfy fundamental desires of the household. We have applied the specification of price that provided the correctly estimated marginal price from the block tariff structure, and employed a maximum likelihood estimation technique to tackle the endogeneity and heteroskedasticity issues. Our estimation of water demand price elasticities are slightly higher (more elastic) than previous study in Perth, but broadly in line with other estimates in the literature.

Keywords: Demand and Price Analysis; Resource/Energy Economics and Policy (search for similar items in EconPapers)
Pages: 25
Date: 2008
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Citations: View citations in EconPapers (5)

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Working Paper: Estimating Urban Residential Water-Demand with Increasing Block Prices: The Case of Perth, Western Australia (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aare08:6010

DOI: 10.22004/ag.econ.6010

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