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Water Supply Security and Willingness to Pay to Avoid Drought Restrictions

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  • DAVID HENSHER
  • NINA SHORE
  • KENNETH TRAIN

Abstract

This paper studies Canberra households' and businesses' willingness to pay (WTP) to avoid drought water restrictions, using stated choice experiments. We find that customers evidence a lack of WTP to avoid most types of drought-induced restrictions. Respondents appear unwilling to pay to avoid low-level restrictions at all and to avoid higher levels of restrictions that are not in place every day. Given the option of watering on alternative days, customers appear willing to adjust their watering schedules compared with paying higher water bills and appear willing to tolerate high-level restrictions for limited periods each year, compared with higher water bills. Copyright 2006 The Economic Society Of Australia.

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Bibliographic Info

Article provided by The Economic Society of Australia in its journal The Economic Record.

Volume (Year): 82 (2006)
Issue (Month): 256 (03)
Pages: 56-66

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Handle: RePEc:bla:ecorec:v:82:y:2006:i:256:p:56-66

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Cited by:
  1. Neal Hughes & Ahmed Hafi & Tim Goesch, 2009. "Urban water management: optimal price and investment policy under climate variability ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 53(2), pages 175-192, 04.
  2. Hughes, Neal & Hafi, Ahmed & Goesch, Tim, 2009. "Urban water management: optimal price and investment policy under climate variability," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 53(2), June.
  3. Productivity Commission, 2008. "Towards Urban Water Reform: A Discussion Paper," Research Papers 0801, Productivity Commission, Government of Australia.
  4. Emma Aisbett & Ralf Steinhauser, 2011. "Maintaining the Common Pool: Voluntary Water Conservation in Response to Increasing Scarcity," ANU Working Papers in Economics and Econometrics 2011-554, Australian National University, College of Business and Economics, School of Economics.
  5. Hughes, Neal & Hafi, Ahmed & Goesch, Tim & Brownlowe, Nathan, 2008. "Urban water management: optimal price and investment policy under uncertainty," 2008 Conference (52nd), February 5-8, 2008, Canberra, Australia 6005, Australian Agricultural and Resource Economics Society.
  6. Freebairn, John W., 2012. "Risk Aversion and Urban Water Decisions," 2012 Conference (56th), February 7-10, 2012, Freemantle, Australia 124206, Australian Agricultural and Resource Economics Society.
  7. Neil Byron & Alan Johnston & Rick Baker & Andrew Barker, 2008. "Towards Urban Water Reform," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 41(4), pages 401-412, December.
  8. Brennan, Donna C. & Tapsuwan, Sorada & Ingram, Gordon, 2002. "The welfare costs of urban outdoor water restrictions," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 51(3), September.
  9. Dupont, Diane P., 2011. "Reclaimed Wastewater and the WTP to avoid Summer Water Restrictions: Incorporation Endogenous Free-riding Beliefs," 85th Annual Conference, April 18-20, 2011, Warwick University, Coventry, UK 108778, Agricultural Economics Society.
  10. Nakamura, A., 2011. "Estimating switching costs after introducing Fixed-Mobile Convergence in Japan," Information Economics and Policy, Elsevier, vol. 23(1), pages 59-71, March.
  11. John Freebairn, 2013. "Imperfect Knowledge and Urban Water Decisions," Economic Papers, The Economic Society of Australia, vol. 32(1), pages 32-40, 03.
  12. R. Quentin Grafton & Michael B. Ward, 2008. "Prices versus Rationing: Marshallian Surplus and Mandatory Water Restrictions," The Economic Record, The Economic Society of Australia, vol. 84(s1), pages S57-S65, 09.

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