IDEAS home Printed from https://ideas.repec.org/p/tky/fseres/2006cf424.html

Bayesian Estimation of Demand Functions under Block Rate Pricing

Author

Listed:
  • Koji Miyawaki

    (Graduate School of Economics, University of Tokyo)

  • Yasuhiro Omori

    (Faculty of Economics, University of Tokyo)

  • Akira Hibiki

    (National Institute for Environmental Studies and Department of Social Engineering, Tokyo Insitute of Technology)

Abstract

This article proposes a Bayesian estimation method of the demand function under block rate pricing, mainly focusing on increasing block rat epricing. Block rate pricing is often observed in public sectors, such as water and electricity. Under this price structure, price changes when consumption exceeds a certain threshold, and the demand function is subject to a piece wise-linear budget constraint. We apply a discrete/continuous choice model to analyze household behavior with such a price system and take a hierarchical Bayesian approach to estimate its demand function. Moreover, a separability condition is additionally considered to obtain proper estimates. The model is extended to allow random coefficients for panel data and spatial correlation to account for consumer heterogeneity of spatial data. The proposed method is applied to estimate the Japanese residential water demand function under increasing block rate pricing.

Suggested Citation

  • Koji Miyawaki & Yasuhiro Omori & Akira Hibiki, 2006. "Bayesian Estimation of Demand Functions under Block Rate Pricing," CIRJE F-Series CIRJE-F-424, CIRJE, Faculty of Economics, University of Tokyo.
    • Handle: RePEc:tky:fseres:2006cf424
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a
    for a similarly titled item that would be available.

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Henrique Monteiro, 2010. "Residential Water Demand in Portugal: checking for efficiency-based justifications for increasing block tariffs," Working Papers Series 1 ercwp0110, ISCTE-IUL, Business Research Unit (BRU-IUL).
    2. Koji Miyawaki & Yasuhiro Omori & Akira Hibiki, 2010. "Discrete/Continuous Choice Model of the Residential Gas Demand on the Nonconvex Budget Set," CIRJE F-Series CIRJE-F-770, CIRJE, Faculty of Economics, University of Tokyo.
    3. 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, September.
    4. Koji Miyawaki & Yasuhiro Omori, 2007. "Duality-Based Analysis of Residential Gas Demand under Decreasing Block Rate Pricing," CIRJE F-Series CIRJE-F-506, CIRJE, Faculty of Economics, University of Tokyo.
    5. Kertous, Mourad & Zerzour, Sahad, 2015. "To pay or not to pay? Water bill and delay in payment in Bejaia (Algeria): A duration analysis," MPRA Paper 67801, University Library of Munich, Germany.
    6. Koji Miyawaki & Yasuhiro Omori & Akira Hibiki, 2018. "A discrete/continuous choice model on a nonconvex budget set," Econometric Reviews, Taylor & Francis Journals, vol. 37(2), pages 89-113, February.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tky:fseres:2006cf424. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CIRJE administrative office (email available below). General contact details of provider: https://edirc.repec.org/data/ritokjp.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.