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Estimation of non-tap water demand in Central American cities

  • Nauges, Celine
  • Strand, Jon

We study water demand among non-tap households in three cities in El Salvador and in marginal barrios in Tegucigalpa, Honduras, using data from identical household studies in the four cities. We estimate water demand functions separately for El Salvador and Tegucigalpa, using a two-step procedure. We find non-tap water demand elasticities with respect to total water cost (defined as the sum of water price and hauling cost) of between −0.4 and −0.7. We discuss implications of the results, for welfare and distributional analysis, for documentation of the value of adding new connections, and for general water sector planning.

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File URL: http://www.sciencedirect.com/science/article/B6VFJ-4KPFKHG-1/2/9cb789a6798657424473fb600b29786a
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Article provided by Elsevier in its journal Resource and Energy Economics.

Volume (Year): 29 (2007)
Issue (Month): 3 (September)
Pages: 165-182

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Handle: RePEc:eee:resene:v:29:y:2007:i:3:p:165-182
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505569

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  1. Lee, Lung-Fei, 1983. "Generalized Econometric Models with Selectivity," Econometrica, Econometric Society, vol. 51(2), pages 507-12, March.
  2. NAUGES Céline & STRAND Jon, 2006. "The Value of Water Connections in Central American Cities: A Revealed Preference Study," LERNA Working Papers 06.23.216, LERNA, University of Toulouse.
  3. Dubin, Jeffrey A & McFadden, Daniel L, 1984. "An Econometric Analysis of Residential Electric Appliance Holdings and Consumption," Econometrica, Econometric Society, vol. 52(2), pages 345-62, March.
  4. Hausman, Jerry A, 1978. "Specification Tests in Econometrics," Econometrica, Econometric Society, vol. 46(6), pages 1251-71, November.
  5. D. McFadden & J. Hausman, 1981. "Specification Tests for the Multinominal Logit Model," Working papers 292, Massachusetts Institute of Technology (MIT), Department of Economics.
  6. Graeme Dandy & Tin Nguyen & Carolyn Davies, 1997. "Estimating Residential Water Demand in the Presence of Free Allowances," Land Economics, University of Wisconsin Press, vol. 73(1), pages 125-139.
  7. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
  8. Schmertmann, Carl P., 1994. "Selectivity bias correction methods in polychotomous sample selection models," Journal of Econometrics, Elsevier, vol. 60(1-2), pages 101-132.
  9. Whittington, D. & Swarna, V., 1994. "The Economic Benefits of Potable Water Supply Projects to Households in Developing Countries," Papers 53, Asian Development Bank.
  10. Strand, Jon & Walker, Ian, 2005. "Water markets and demand in Central American cities," Environment and Development Economics, Cambridge University Press, vol. 10(03), pages 313-335, June.
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