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Estimating water demand using price differences of wastewater services

Nathan DeMaagd () and Michael Roberts ()

No 2020-1, Working Papers from University of Hawaii Economic Research Organization, University of Hawaii at Manoa

Abstract: Many homes in Hawai‘i use cesspools and other on-site disposal systems (OSDS) instead of the municipal sewer system. Because bills combine water and waste-water services, and homes with OSDS do not pay for sewer service, OSDS residences have lower monthly bills compared to those with sewer-connected systems. We use this price difference in conjunction with selection on observables and matching methods to estimate the price elasticity of residential water demand. Matching methods indicate that OSDS residences have systematically different characteristics than those with sewer-connected systems, suggesting an imperfect natural experiment.

Pages: 36 pages
Date: 2020-07
New Economics Papers: this item is included in nep-reg
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https://uhero.hawaii.edu/wp-content/uploads/2020/07/UHEROwp2001.pdf First version, 2020 (application/pdf)

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