Institutional, geographic, and facility factors affecting differences in prices for wastewater services
The provision of wastewater services is an important infrastructure service that affects social welfare. It improves the quality of community life by promoting sanitary conditions and minimizing the negative impact of wastewater on ecosystems. The price for this important public service, however, varies considerably across regions and localities. In this paper, we examine the physical factors and institutional characteristics that affect wastewater service prices across regions and localities. Our major concerns are the following: (1) institutional arrangements and characteristics of a wastewater utility, (2) government regulations, (3) supply factors and characteristics, and (4) natural environments and local characteristics. To analyze the price differences, we employ the demand and price equations for wastewater services using a simultaneous equations framework. For empirical estimation, we utilize a seemingly unrelated regression (SUR) method to account for the correlations between the residuals in the four price equations for wastewater services. Our empirical results are that the institutional arrangement of services, including monthly charges (versus bi-monthly or quarterly charges), provision of other infrastructure services in addition to wastewater services, and long-term debt, explain much of the price difference. In addition, the wastewater prices are influenced by state environmental regulations as well as supply factors, such as the number of wastewater treatment plants and infiltration and inflow into the sewer system. Interestingly, local geographic and meteorologic factors that were hypothesized to affect the selection of treatment processes were not found to be associated with price. These findings suggest ways wastewater services might be offered at lower prices for users. Copyright Springer-Verlag 2012
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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 49 (2012)
Issue (Month): 3 (December)
|Contact details of provider:|| Web page: http://www.springer.com|
|Order Information:||Web: http://link.springer.com/journal/168|
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.:
- Douglas Staiger & James H. Stock, 1994.
"Instrumental Variables Regression with Weak Instruments,"
NBER Technical Working Papers
0151, National Bureau of Economic Research, Inc.
- Douglas Staiger & James H. Stock, 1997. "Instrumental Variables Regression with Weak Instruments," Econometrica, Econometric Society, vol. 65(3), pages 557-586, May.
- Cameron,A. Colin & Trivedi,Pravin K., 2005. "Microeconometrics," Cambridge Books, Cambridge University Press, number 9780521848053, December.
- Bae, Suho, 2007. "Explaining Geographical Differences in Water Prices: Do Institutional Factors Really Matter?," The Review of Regional Studies, Southern Regional Science Association, vol. 37(2), pages 207-50.
- Steve H. Hanke & Roland W. Wentworth, 1981. "On the Marginal Cost of Wastewater Services," Land Economics, University of Wisconsin Press, vol. 57(4), pages 558-567.
- Halvorsen, Robert, 1975. "Residential Demand for Electric Energy," The Review of Economics and Statistics, MIT Press, vol. 57(1), pages 12-18, February.
- Breusch, T.S. & Pagan, A.R., .
"The Lagrange multiplier test and its applications to model specification in econometrics,"
CORE Discussion Papers RP
412, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- T. S. Breusch & A. R. Pagan, 1980. "The Lagrange Multiplier Test and its Applications to Model Specification in Econometrics," Review of Economic Studies, Oxford University Press, vol. 47(1), pages 239-253.
When requesting a correction, please mention this item's handle: RePEc:spr:anresc:v:49:y:2012:i:3:p:767-788. 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: (Sonal Shukla)or (Rebekah McClure)
If references are entirely missing, you can add them using this form.