Estimating Urban Residential Water-Demand with Increasing Block Prices: The Case of Perth, Western Australia
AbstractThis study uses panel data at suburb level to estimates the elasticity water demands in Perth, Australia from 1995 to 2005. After deriving the consumer’s water demand under a non-linear budget constraint, we estimate the water demand model, which accounts for how water (and other purchased goods) is used to satisfy fundamental desires of the household. We have applied the specification of price that provided the correctly estimated marginal price from the block tariff structure, and employed a maximum likelihood estimation technique to tackle the endogeneity and heteroskedasticity issues. Our estimation of water demand price elasticities are slightly higher (more elastic) than previous study in Perth, but broadly in line with other estimates in the literature.
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Bibliographic InfoPaper provided by University of Western Australia, School of Agricultural and Resource Economics in its series Working Papers with number 7061.
Date of creation: 2007
Date of revision:
water demand; water pricing; block pricing; water resource management; household model; Resource /Energy Economics and Policy; Q21; Q25; Q23;
Other versions of this item:
- Xayavong, Vilaphonh & Burton, Michael P. & White, Benedict, 2008. "Estimating Urban Residential Water-Demand With Increasing Block Prices: The Case of Perth, Western Australia," 2008 Conference (52nd), February 5-8, 2008, Canberra, Australia 6010, Australian Agricultural and Resource Economics Society.
- Q21 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Demand and Supply (the Commons)
- Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
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- Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
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