Panel Data Analysis of Japanese Residential Water Demand Using a Discrete/Continuous Choice Approach
AbstractBlock rate pricing is often applied to income taxation, telecommunication services, and brand marketing in addition to its best-known application in public utility services. Under block rate pricing, consumers face piecewise-linear budget constraints. A discrete/ continuous choice approach is usually used to account for piecewise-linear budget constraints for demand and price endogeneity. A recent study proposed a methodology to incorporate a separability condition that previous studies ignore, by implementing a Markov chain Monte Carlo simulation based on a hierarchical Bayesian approach. To extend this approach to panel data, our study proposes a Bayesian hierarchical model incorporating the individual effect. The random coefficients model result shows that the price and income elasticities are estimated to be negative and positive, respectively, and the coefficients of the number of members and the number of rooms per household are estimated to be positive. Furthermore, the AR(1) error component model suggests that the Japanese residential water demand does not have serial correlation.
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Bibliographic InfoPaper provided by CIRJE, Faculty of Economics, University of Tokyo in its series CIRJE F-Series with number CIRJE-F-717.
Date of creation: Feb 2010
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Other versions of this item:
- Koji Miyawaki & Yasuhiro Omori & Akira Hibiki, 2011. "Panel Data Analysis Of Japanese Residential Water Demand Using A Discrete/Continuous Choice Approach," The Japanese Economic Review, Japanese Economic Association, vol. 62(3), pages 365-386, 09.
- Koji Miyawaki & Yasuhiro Omori & Akira Hibiki, 2010. "Panel Data Analysis of Japanese Residential Water Demand Using a Discrete/Continuous Choice Approach," Global COE Hi-Stat Discussion Paper Series gd09-123, Institute of Economic Research, Hitotsubashi University.
- Koji Miyawaki & Yasuhiro Omori & Akira Hibiki, 2010. "Panel Data Analysis of Japanese Residential Water Demand Using a Discrete/Continuous Choice Approach," CIRJE F-Series CIRJE-F-764, CIRJE, Faculty of Economics, University of Tokyo.
- C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Longitudinal Data; Spatial Time Series
- C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models; Switching Regression Models
- Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-02-27 (All new papers)
- NEP-DCM-2010-02-27 (Discrete Choice Models)
- NEP-ECM-2010-02-27 (Econometrics)
- NEP-MKT-2010-02-27 (Marketing)
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- Motta, Ronaldo Ser A Da & Huber, Richard M. & Ruitenbeek, H. Jack, 1999. "Market based instruments for environmental policymaking in Latin America and the Caribbean: lessons from eleven countries," Environment and Development Economics, Cambridge University Press, vol. 4(02), pages 177-201, May.
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