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Water Demand Under Alternative Price Structures / Sheila Olmstead, W. Michael Hanemann, Robert N. Stavins.
- Format:
- Book
- Author/Creator:
- Olmstead, Sheila.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w13573.
- NBER working paper series no. w13573
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2007.
- Summary:
- We estimate the price elasticity of water demand with household-level data, structurally modeling the piecewise-linear budget constraints imposed by increasing-block pricing. We develop a mathematical expression for the unconditional price elasticity of demand under increasing-block prices and compare conditional and unconditional elasticities analytically and empirically. We test the hypothesis that price elasticity may depend on price structure, beyond technical differences in elasticity concepts. Due to the possibility of endogenous utility price structure choice, observed differences in elasticity across price structures may be due either to a behavioral response to price structure, or to underlying heterogeneity among water utility service areas.
- Notes:
- Print version record
- November 2007.
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