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Estimating water demand using price differences of wastewater services

Author

Listed:
  • Nathan DeMaagd

    (University of Hawai‘i at Manoa Department of Economics)

  • Michael J. Roberts

    (University of Hawai‘i at Manoa Department of Economics, University of Hawai‘i Economic Research Organization, University of Hawai‘i Sea Grant College Program)

Abstract

Many homes in Hawai‘i use cesspools and other on-site disposal systems (OSDS) instead of the municipal sewer system. Because bills combine water and waste-water services, and homes with OSDS do not pay for sewer service, OSDS residences have lower monthly bills compared to those with sewer-connected systems. We use this price difference in conjunction with selection on observables and matching methods to estimate the price elasticity of residential water demand. Matching methods indicate that OSDS residences have systematically different characteristics than those with sewer-connected systems, suggesting an imperfect natural experiment.

Suggested Citation

  • Nathan DeMaagd & Michael J. Roberts, 2020. "Estimating water demand using price differences of wastewater services," Working Papers 2020-1, University of Hawaii Economic Research Organization, University of Hawaii at Manoa.
    • Handle: RePEc:hae:wpaper:2020-1
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    References listed on IDEAS

    as
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    More about this item

    JEL classification:

    • Q21 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Demand and Supply; Prices
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water

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