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Privately Operated Water Utilities, Municipal Price Negotiation, and Estimation of Residential Water Demand: The Case of France

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  • Céline Nauges
  • Alban Thomas

Abstract

This paper addresses the issue of price negotiation between a municipality and a private water utility operator, and its implications for residential water demand estimation. We use appropriate econometric procedures to estimate a water demand equation on a panel of French municipalities. We find evidence that negotiated water price depends on municipality's characteristics, causing endogeneity of price in the demand equation. The impact of average household income, housing, and system features such as metering is investigated both on municipal consumption and price. Estimated price and income elasticities are significant and close to previous household level studies.

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Bibliographic Info

Article provided by University of Wisconsin Press in its journal Land Economics.

Volume (Year): 76 (2000)
Issue (Month): 1 ()
Pages: 68-85

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Handle: RePEc:uwp:landec:v:76:y:2000:i:1:p:68-85

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Web page: http://le.uwpress.org/

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  1. James J. Opaluch, 1982. "Urban Residential Demand for Water in the United States: Further Discussion," Land Economics, University of Wisconsin Press, vol. 58(2), pages 225-227.
  2. Hausman, Jerry A. & Taylor, William E., 1981. "Panel data and unobservable individual effects," Journal of Econometrics, Elsevier, vol. 16(1), pages 155-155, May.
  3. Breusch, Trevor S & Mizon, Grayham E & Schmidt, Peter, 1989. "Efficient Estimation Using Panel Data," Econometrica, Econometric Society, vol. 57(3), pages 695-700, May.
  4. Lars Gårn Hansen, 1996. "Water and Energy Price Impacts on Residential Water Demand in Copenhagen," Land Economics, University of Wisconsin Press, vol. 72(1), pages 66-79.
  5. J. E. Schefter & E. L. David, 1985. "Estimating Residential Water Demand under Multi-Part Tariffs Using Aggregate Data," Land Economics, University of Wisconsin Press, vol. 64(3), pages 272-280.
  6. Moffitt, Robert, 1990. "The Econometrics of Kinked Budget Constraints," Journal of Economic Perspectives, American Economic Association, vol. 4(2), pages 119-39, Spring.
  7. David L. Chicoine & Ganapathi Ramamurthy, 1986. "Evidence on the Specification of Price in the Study of Domestic Water Demand," Land Economics, University of Wisconsin Press, vol. 62(1), pages 26-32.
  8. Patrick Point, 1993. "Partage de la ressource en eau et demande d'alimentation en eau potable," Revue Économique, Programme National Persée, vol. 44(4), pages 849-862.
  9. Henry S. Foster, Jr. & Bruce R. Beattie, 1979. "Urban Residential Demand for Water in the United States," Land Economics, University of Wisconsin Press, vol. 55(1), pages 43-58.
  10. Patrick Point, 1993. "Partage de la ressource en eau et demande d'alimentation en eau potable," Revue économique, Presses de Sciences-Po, vol. 0(4), pages 849-862.
  11. Julie A. Hewitt & W. Michael Hanemann, 1995. "A Discrete/Continuous Choice Approach to Residential Water Demand under Block Rate Pricing," Land Economics, University of Wisconsin Press, vol. 71(2), pages 173-192.
  12. R. Bruce Billings, 1982. "Specification of Block Rate Price Variables in Demand Models," Land Economics, University of Wisconsin Press, vol. 58(3), pages 386-394.
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