The Value of Scarce Water: Measuring the Inefficiency of Municipal Regulations / Erin T. Mansur, Sheila M. Olmstead.

Format:

Book

Author/Creator:

Mansur, Erin T.

Contributor:

National Bureau of Economic Research.

Olmstead, Sheila M.

Series:

Working Paper Series (National Bureau of Economic Research) no. w13513.

NBER working paper series no. w13513

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

The Value of Scarce Water

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2007.

Summary:

Rather than allowing water prices to reflect scarcity rents during periods of drought-induced excess demand, policy makers have mandated command-and-control approaches, like the curtailment of certain uses, primarily outdoor watering. Using unique panel data on residential end-uses of water, we examine the welfare implications of typical drought policies. Using price variation across and within markets, we identify end-use specific price elasticities. Our results suggest that current policies target water uses that households, themselves, are most willing to forgo. Nevertheless, we find that use restrictions have costly welfare implications, primarily due to household heterogeneity in willingness-to-pay for scarce water.

Notes:

Print version record

October 2007.