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Responses to changes in domestic water tariff structures: An analysis on household-level data from Granada, Spain

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  • Pérez, María
  • García-Valiñas, María A.
  • Martínez-Espiñeira, Roberto

Abstract

A problem in estimating water demand functions is the presence of unobserved individual heterogeneity, as estimating a common demand function for every observation may not be correct in the sense that the estimated water function is unlikely to represent consumer's behavior. We implement latent class models to define consumers groups with similar preferences while we estimate heterogeneous water demand functions. Our analysis exploits data on residential water demand and consumers'preferences from a household-level panel obtained by combining information from a survey of 1465 domestic users in the city of Granada and bimonthly price and consumption data supplied by this city's water supplier from the period 2009-2011.

Suggested Citation

  • Pérez, María & García-Valiñas, María A. & Martínez-Espiñeira, Roberto, 2013. "Responses to changes in domestic water tariff structures: An analysis on household-level data from Granada, Spain," Efficiency Series Papers 2013/04, University of Oviedo, Department of Economics, Oviedo Efficiency Group (OEG).
    • Handle: RePEc:oeg:wpaper:2013/04
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    File URL: https://www.unioviedo.es/oeg/ESP/esp_2013_04.pdf
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    More about this item

    Keywords

    water demand; water pricing; panel data; household microdata; latent class analysis;
    All these keywords.

    JEL classification:

    • Q21 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Demand and Supply; Prices
    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water

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