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Forecasting the Public's Acceptability of Municipal Water Regulation and Price Rationing for Communities on the Ogallala Aquifer


  • Edwards, Jeffrey A.
  • Wade, Tara R.
  • Burkey, Mark L.
  • Pumphrey, R. Gary


Among many, increasing the price of municipal water is considered to be the most effective mechanism for enhancing municipal water conservation, whether during times of drought or not. However, increasing the price of something that is considered to be, literally, a life-giving resource is politically taboo. This study follows two others that evaluate survey data with Likert scale responses, in determining whether or not constituents would outright reject the idea of using price to ration municipal water. But it goes several steps further--it controls for both community and respondent level variables, calculates and evaluates in-sample response probabilities, and most importantly, attempts to forecast the attitudes of constituents in communities that are not in our survey sample. In the end, our model produces both in-sample and out-of-sample response probabilities that are reasonable, and relatively stable across communities; it therefore provides communities and researchers with a means to gauge public support for pricing initiatives.

Suggested Citation

  • Edwards, Jeffrey A. & Wade, Tara R. & Burkey, Mark L. & Pumphrey, R. Gary, 2013. "Forecasting the Public's Acceptability of Municipal Water Regulation and Price Rationing for Communities on the Ogallala Aquifer," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 149579, Agricultural and Applied Economics Association.
  • Handle: RePEc:ags:aaea13:149579

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    References listed on IDEAS

    1. Papke, Leslie E. & Wooldridge, Jeffrey M., 2005. "A computational trick for delta-method standard errors," Economics Letters, Elsevier, vol. 86(3), pages 413-417, March.
    2. Greene,William H. & Hensher,David A., 2010. "Modeling Ordered Choices," Cambridge Books, Cambridge University Press, number 9780521194204, March.
    3. Hugh Sibly, 2006. "Efficient Urban Water Pricing," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 39(2), pages 227-237, June.
    4. Christopher Timmins, 2003. "Demand-Side Technology Standards Under Inefficient Pricing Regimes," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 26(1), pages 107-124, September.
    5. Bonnie G. Colby, 1990. "Transactions Costs and Efficiency in Western Water Allocation," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(5), pages 1184-1192.
    6. Pumphrey, R. Gary & Edwards, Jeffrey A. & Becker, Klaus G., 2008. "Urban and rural attitudes toward municipal water controls: A study of a semi-arid region with limited water supplies," Ecological Economics, Elsevier, vol. 65(1), pages 1-12, March.
    7. Olmstead, Sheila M. & Michael Hanemann, W. & Stavins, Robert N., 2007. "Water demand under alternative price structures," Journal of Environmental Economics and Management, Elsevier, vol. 54(2), pages 181-198, September.
    8. Polyzou, E. & Jones, N. & Evangelinos, K.I. & Halvadakis, C.P., 2011. "Willingness to pay for drinking water quality improvement and the influence of social capital," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(1), pages 74-80, February.
    9. O'Brien, Daniel M. & Woolverton, Mike & Maddy, Lucas & Pozo, Veronica F. & Roe, Joshua D. & Tajchman, Jenna R. & Yeager, Elizabeth A., 2008. "A Case Study of the Impact of Bioenergy Development Upon Crop Production, Livestock Feeding, and Water Resource Usage in Kansas," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6432, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
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    More about this item


    water conservation; water pricing; regulation; ethanol; Likert scale; ordered logit; Environmental Economics and Policy; Q25; Q56; R52;

    JEL classification:

    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • H44 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Goods: Mixed Markets

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