Do Consumers React to the Shape of Supply? Water Demand Under Heterogeneous Price Structures

Sheila Olmstead, Michael Hanemann () and Robert Stavins
Additional contact information
Sheila Olmstead: Yale U

Working Paper Series from Harvard University, John F. Kennedy School of Government

Abstract: We perform an empirical analysis of the influence of price and price structure on residential water demand, using the most price-diverse, detailed, household-level water demand data yet available for this purpose. Ours is the first analysis to address both the simultaneous determination of marginal price and water demand under block pricing, and the possibility of endogenous price structures in the cross section. We find that households facing increasing block prices may be more sensitive to price increases than households facing uniform marginal prices. Tests for endogenous price structures cannot rule out a behavioral response to the shape of supply, but suggest that observed differences in price elasticity under supply curves of varying shapes may result, in part, from underlying heterogeneity among utility service areas.

Date: 2005-06
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://research.hks.harvard.edu/publications/work ... ?PubId=3028&type=WPN

Related works:
Working Paper: Do Consumers React to the Shape of Supply? Water Demand under Heterogeneous Price Structures (2005)
Working Paper: Do Consumers React to the Shape of Supply? Water Demand under Heterogeneous Price Structures (2005)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ecl:harjfk:rwp05-039

Access Statistics for this paper

More papers in Working Paper Series from Harvard University, John F. Kennedy School of Government Contact information at EDIRC.
Bibliographic data for series maintained by ().