Advanced Search
MyIDEAS: Login

Residential water demand under block rates: a Portuguese case study

Contents:

Author Info

  • Rita Martins

    ()
    (Faculdade de Economia, Universidade de Coimbra)

  • Adelino Fortunato

    ()
    (GEMF and Faculdade de Economia, Universidade de Coimbra)

Abstract

A residential water demand equation is estimated using a panel data sample of 5 Portuguese local communities and 72 months, corresponding to a total number of 360 observations. Because of the presence of multi-part tariffs, we use as explanatory variables the two common price-related variables: marginal price and difference. To prevent the simultaneity bias from using observed quantities to determine the values of marginal price and difference directly from the rate schedule, we use an instrumental variable approach to create a constant marginal price and difference parameters for each rate structure. The price elasticity value obtained fall within the range of those found in other case studies. Thus, although presenting weak elasticity, price seems to play a role in water demand management. However, we do not confirm the expected influence of difference on residential water demand. This can be a consequence of the complexity of the Portuguese water tariffs and the confusing signs that come from the simultaneous use of fixed quotas and increasing block tariffs. So, it is imperative to clarify water tariffs objectives by reviewing the Portuguese water tariffs design processes.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://gemf.fe.uc.pt/workingpapers/pdf/2005/gemf05_09.pdf
Download Restriction: no

Bibliographic Info

Paper provided by GEMF - Faculdade de Economia, Universidade de Coimbra in its series GEMF Working Papers with number 2005-09.

as in new window
Length: 25 pages
Date of creation: 2005
Date of revision:
Publication status: Published in Water Policy 9(2): 217-230, 2007.
Handle: RePEc:gmf:wpaper:2005-09

Contact details of provider:
Postal: Av. Dias da Silva, 165, 3004-512 COIMBRA
Phone: + 351 239 790 500
Fax: +351 239 403511
Email:
Web page: http://www.uc.pt/en/feuc/gemf/
More information through EDIRC

Related research

Keywords: demand; water utilities; pricing policy.;

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Céline Nauges & Alban Thomas, 2000. "Privately Operated Water Utilities, Municipal Price Negotiation, and Estimation of Residential Water Demand: The Case of France," Land Economics, University of Wisconsin Press, vol. 76(1), pages 68-85.
  2. Roberto Martinez-Espineira & Celine Nauges, 2004. "Is all domestic water consumption sensitive to price control?," Applied Economics, Taylor & Francis Journals, vol. 36(15), pages 1697-1703.
  3. 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.
  4. R. Bruce Billings & Donald E. Agthe, 1980. "Price Elasticities for Water: A Case of Increasing Block Rates," Land Economics, University of Wisconsin Press, vol. 56(1), pages 73-84.
  5. Renzetti, Steven, 1992. "Evaluating the welfare effects of reforming municipal water prices," Journal of Environmental Economics and Management, Elsevier, vol. 22(2), pages 147-163, March.
  6. 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.
  7. Serge Garcia & Arnaud Reynaud, 2004. "Estimating the benefits of efficient water pricing in France," Working Papers 23321, Institut National de la Recherche Agronomique, France.
  8. 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.
  9. Lester D. Taylor, 1975. "The Demand for Electricity: A Survey," Bell Journal of Economics, The RAND Corporation, vol. 6(1), pages 74-110, Spring.
  10. Mary E. Renwick & Sandra O. Archibald, 1998. "Demand Side Management Policies for Residential Water Use: Who Bears the Conservation Burden?," Land Economics, University of Wisconsin Press, vol. 74(3), pages 343-359.
  11. Garcia, Serge & Reynaud, Arnaud, 2004. "Estimating the benefits of efficient water pricing in France," Resource and Energy Economics, Elsevier, vol. 26(1), pages 1-25, March.
  12. 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.
  13. Michael L. Nieswiadomy & David J. Molina, 1989. "Comparing Residential Water Demand Estimates under Decreasing and Increasing Block Rates Using Household Data," Land Economics, University of Wisconsin Press, vol. 65(3), pages 280-289.
  14. Renwick, Mary E. & Green, Richard D., 2000. "Do Residential Water Demand Side Management Policies Measure Up? An Analysis of Eight California Water Agencies," Journal of Environmental Economics and Management, Elsevier, vol. 40(1), pages 37-55, July.
  15. 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.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Sidibé, Amadou, 2010. "Demand for soil, water and forest conservation in Burkina Faso," Department of Forest Economics publications 2345, Swedish University of Agricultural Sciences, Department of forest economics.
  2. Maria A. García-Valiñas & Roberto Martínez-Francisco & González-Gómez, 2010. "Water affordability: alternativem measurement and explanatory Factors in Andalusia," Centre for Water Economics, Environment and Policy Papers 1014, Centre for Water Economics, Environment and Policy, Crawford School of Public Policy, The Australian National University.
  3. Henrique Monteiro, 2010. "Residential Water Demand in Portugal: checking for efficiency-based justifications for increasing block tariffs," Working Papers Series 1 ercwp0110, ISCTE-IUL, Business Research Unit (BRU-IUL).
  4. Maria A. García‐Valiñas & Roberto Martínez‐Espiñeira & Francisco González‐Gómez, 2010. "Economics of Water Reform in the Murray-Darling Basin," Centre for Water Economics, Environment and Policy Papers 1005, Centre for Water Economics, Environment and Policy, Crawford School of Public Policy, The Australian National University.
  5. Rita Martins & Carlota Quintal & Eduardo Barata & Luís Cruz, 2010. "Water Pricing and Social Equity in Portuguese Municipalities," GEMF Working Papers 2010-17, GEMF - Faculdade de Economia, Universidade de Coimbra.
  6. Schleich, Joachim & Hillenbrand, Thomas, 2009. "Determinants of residential water demand in Germany," Ecological Economics, Elsevier, vol. 68(6), pages 1756-1769, April.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:gmf:wpaper:2005-09. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sara Santos).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.