perceived price in residential water demand evidence from a natural experiment abstract under complicated billing structures the price to which consumers respond remains inconclusive in this paper i exploit a quasi experiment to estimate a causal effect of price for residential water customers during the introduction of increasing block rates for a north carolina utility perceived price is identified through a billing anomaly in which changes in marginal and average prices move in opposite directions empirical results contribute evidence that residential water customers respond to average price average price elasticity estimates vary from 0 43 to 1 14 across the distribution of consumption in triple difference models with an estimate of 0 31 in the tightest bandwidth of regression discontinuity specifications

a note on price perception in water demand models a household s decision to acquire price knowledge is endogenous in the demand for utility services and may affect elasticities and consumption levels a simultaneous equation model with endogenous switching is developed to evaluate the effects of price

electricity demand estimates under increasing block rates using price variables calculated at observed consumption levels this study finds significant bias in ordinary least squares estimates of price elasticities of electricity demand the bias is most severe for specifications using observed average price the finding is important for future econometric work since this type of rate structure is becoming more common the evidence indicates that inappropriate use of ordinary least squares ols overestimates that rate structure premium effect on demand and may underestimate the marginal price elasticity the use of an instrumental variables technique applied to actual rate schedules proves consistent parameter estimates regardless of the rate structure 20 references 3 tables

energy efficiency programs in the context of increasing block tariffs the case of residential electricity in mexico increasing block pricing schemes represent difficulties for applied researchers who try to recover demand parameters in particular price and income elasticities the mexican residential electricity tariff structure is amongst the most intricate around the globe in this paper we estimate the residential electricity demand and use the corresponding structural parameter estimates to simulate an energy efficiency improvement scenario as suggested by the energy transition law of december 2015 the simulated program consists of a massive replacement of electric appliances air conditioners fans refrigerators washing machines and light bulbs for more energy efficient units the main empirical findings are the following overall residential electricity consumption decreases 8 9 and the associated expenditure falls 11 1 additionally the electricity subsidy decreases 360 million of usd per year and there is an annual cut in co2 emissions of 3 5 million of tons

privately operated water utilities municipal price negotiation and estimation of residential water demand the case of france this paper addresses the issue of price negotiation between a municipality and a private water utility operator and its implications for residential water demand estimation we use appropriate econometric procedures to estimate a water demand equation on a panel of french municipalities we find evidence that negotiated water price depends on municipality s characteristics causing endogeneity of price in the demand equation the impact of average household income housing and system features such as metering is investigated both on municipal consumption and price estimated price and income elasticities are significant and close to previous household level studies

how does parental leave affect fertility and return to work evidence from two natural experiments this paper analyzes the effects of changes in the duration of paid job protected parental leave on mothers higher order fertility and postbirth labor market careers identification is based on a major austrian reform increasing the duration of parental leave from one year to two years for any child born on or after july 1 1990 we find that mothers who give birth to their first child immediately after the reform have more second children than prereform mothers and that extended parental leave significantly reduces return to work employment and earnings also decrease in the short run but not in the long run fertility and work responses vary across the population in ways suggesting that both cash transfers and job protection are relevant increasing parental leave for a future child increases fertility strongly but leaves short run postbirth careers relatively unaffected partially reversing the 1990 extension a second 1996 reform improves employment and earnings while compressing the time between births

price elasticity of groundwater demand attenuation and amplification bias due to incomplete information measurement errors in both human and natural components of agricultural and environmental systems can be as much a source of estimation bias as omitted variables selfselection simultaneity and reverse causality nonetheless partly because of difficulties in obtaining data there is less literature on measurement error problems than on other endogeneity problems this article examines estimation bias in the price elasticity of groundwater consumption for irrigated agriculture on the intensive margin the price at issue is for the energy used in pumping and pressurizing water for delivery lacking the precise unit irrigation cost previous studies imputed irrigation costs we first consider groundwater irrigation costs and identify factors that can cause measurement errors in the process of imputation under incomplete information about the determinants of irrigation costs we follow this by systematically analyzing the potential bias caused by measurement errors using econometric theory along with monte carlo simulations where appropriate we then quantify actual measurement errors making use of a unique dataset in which energy and groundwater consumption data are matched for individual observations finally we compare regression results using exact irrigation costs as opposed to imputed ones we find evidence of substantial measurement errors resulting in attenuation and amplification bias in the price elasticity of irrigation water consumption on the intensive margin our results indicate that measurement errors in irrigation costs can lead to misleading policy implications related to water and energy pricing as a tool to conserve water we also show that estimating the energy price elasticity of groundwater use is not as straightforward as previously thought

responses to changes in domestic water tariff structures a latent class analysis on household level data from granada spain a problem that affects the estimation of water demand functions is the presence of unobserved individual heterogeneity which means that a common demand function is unlikely to represent the behavior of all users we implement latent class models to estimate water demand functions for four groups of users who are classified according to their unobservable preferences this more flexible approach makes it possible to distinguish four different response patterns to changes in the drivers of water use including different price elasticities these results should be of particular interest to regulators who would like to tailor water demand management policy to heterogeneous users our analysis exploits household level panel data on residential water demand and consumers characteristics obtained by combining information from a survey of 1 465 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

infrastructure quality and the subsidy trap abstract electricity and water are often subsidized in developing countries to increase their affordability for low income households ideally such subsidies would create sufficient demand in poor neighborhoods to encourage private investment in their infrastructure instead many regions receiving large subsidies have precarious distribution networks supplying users who never pay using a structural model of household electricity demand in colombia i predict the change in consumption and profits from upgrading low quality electricity connections i show that the existing subsidies which provide greater transfers to areas with unreliable supply deter investment to modernize infrastructure finally i analyze alternative programs with stronger investment incentives jel h23 h54 l94 l98 o12 o13

does paternity leave reduce fertility abstract we find that the introduction of two weeks of paid paternity leave in spain in 2007 led to delays in subsequent fertility following a regression discontinuity design and using rich administrative data we show that parents who were just entitled to the new paternity leave took longer to have another child compared to just ineligible parents we also show that older eligible couples were less likely to have an additional child within the following six years after the introduction of the reform we provide evidence in support of two potentially complementary channels behind the negative effects on subsequent fertility first fathers increasing involvement in childcare led to higher labor force attachment among mothers this may have raised the opportunity cost of an additional child we also find that men reported lower desired fertility after the reform possibly due to their increased awareness of the costs of childrearing or to a shift in preferences from child quantity to quality

residential consumption of gas and electricity in the u s the role of prices and income abstract we study the residential demand for electricity and gas working with nationwide household level data that cover recent years namely 1997 2007 our dataset is a mixed panel multi year cross sections of dwellings households in the 50 largest metropolitan areas in the united states as of 2008 we estimate static and dynamic models of electricity and gas demand we find strong household response to energy prices both in the short and long term from the static models we get estimates of the own price elasticity of electricity demand in the 0 860 to 0 667 range while the own price elasticity of gas demand is 0 693 to 0 566 these results are robust to a variety of checks contrary to earlier literature metcalf and hassett 1999 reiss and white 2005 we find no evidence of significantly different elasticities across households with electric and gas heat the price elasticity of electricity demand declines with income but the magnitude of this effect is small these results are in sharp contrast to much of the literature on residential energy consumption in the united states and with the figures used in current government agency practice our results suggest that there might be greater potential for policies which affect energy price than may have been previously appreciated

microeconometric analysis of residential water demand this paper develops a structural model for obtaining price elasticities and evaluating consumer s response to changes in nonlinear tariffs when only panel data on household consumption are available the model and the empirical strategy address problems implied by nonlinear tariffs existence of a fixed cost and use of limited data giving rise to a random effects model with a nonlinear individual effect results show that the estimated model does well at fitting data and demand is inelastic although elasticity varies by initial consumption block then i estimate welfare consequences of implementing several demand policies

dynamic demand for residential electricity in taiwan under seasonality and increasing block pricing abstract this paper studies the dynamic demand for residential electricity in taiwan employing a monthly panel data set composed of 19 counties and spanning the period from 2007 01 to 2013 12 the partial adjustment model used addresses the endogeneity of the electricity price that results from the increasing block pricing the estimated results show that there is a significant seasonal difference in the demand for electricity between the summer and non summer periods both the adjustment speed and own price elasticity during the summer months are found to be lower than those in the non summer months due to the hot weather in summer it is easier for consumers to adjust their electricity consumption in response to the changes in electricity pricing during the non summer time the estimated inelastic short run and long run income effects show that electricity is a necessity for consumers moreover the controversial electricity conservation policies are found to be ineffective measures for reducing electricity consumption in taiwan

a proposal for social pricing of water supply in cote d ivoire we consider the design of a nonlinear social tariff for residential water in cote d ivoire which is a case of a monopolistic private operator supplying a population of heterogeneous consumers the proposed optimal tariff includes an initial social block with a low unit price and higher consumption blocks with a monopoly pricing rule this optimal nonlinear tariff is calibrated using econometric estimates of a panel data residential water demand equation welfare changes associated with moving from the actual tariff to approximations of the optimal pricing system are computed under different tariff scenarios we find that gains in consumer welfare would outweigh losses in producer surplus in a majority of ivorian local communities

demand for piped and non piped water supply services evidence from southwest sri lanka in many countries water supply is a service that is seriously underpriced especially for residential consumers this has led to a call for setting cost recovery policies to ensure that the tariffs charged for water supply cover the full cost of service provision identification of factors driving piped and non piped water demand is a necessary prerequisite for predicting how consumers will react to such price increases using cross sectional data of 1 800 households from southwest sri lanka we estimate water demand functions for piped and non piped households using appropriate econometric techniques the marginal price elasticity is estimated at 0 15 for households exclusively relying on piped water and at 0 37 for households using piped water but supplementing their supply with other water sources the time cost elasticity for households relying on non piped water only is estimated at 0 06 on average but varying across sources for both piped and non piped households we find evidence of substitutability between water from different sources we discuss the implications of these results in terms of pricing policy

will the stork return to europe and japan understanding fertility within developed nations we seek to explain the differences in fertility rates across high income countries by focusing on the interaction between the increasing status of women in the workforce and their status in the household particularly with regards to child care and home production we observe three distinct phases in women s status generated by the gradual increase in women s workforce opportunities in the earliest phase characteristic of the 1950s and 1960s in the united states women earn low wages relative to men and are expected to shoulder all of the child care at home as a result most women specialize in home production and raising children in an intermediate stage women have improved but not equal labor market opportunities but their household status lags women in this stage are still expected to do the majority of child care and household production increasing access to market work increases the opportunity cost of having children and fertility falls female labor force participation increases working women in this phase of development have the strongest disincentives to having additional children since the entire burden of child care falls on them in the final phase of development women s labor market opportunities begin to equal those of men in addition the increased household bargaining power that comes from more equal wages results in much higher if not gender equal male participation in household production female labor force participation is higher than in the intermediate phase the increased participation of men in the household also reduces the disincentives for women to have additional children and fertility rates rise compared to the intermediate phase the intermediate low fertility phase might describe japan italy and spain in the present day while the scandinavian countries the netherlands and the modern day united states may be entering the final phase after presenting the empirical evidence we predict that high income countries with the lowest fertility rates are likely to see an increase in fertility in the coming decades

a discrete continuous choice approach to residential water demand under block rate pricing reply waldman is quite correct in noting that the microeconomic theory of block rate pricing in hewitt and hanemann hh 1995 is given for the general case of a k block rate structure whereas the econometric theory is largely confined to the case of exactly two blocks the extension in waldman to the more general case of k blocks is correct although the extension itself could be even more general if it addressed the nonnegativity of demand as is demonstrated below that no apparent attention was paid to the nonnegativity of demand in hh may be attributed to the fact that the need to do so was negated by a fortuitous assumption in the earlier work although that assumption that the errors are multiplicative and lognormally distributed was only maintained and not tested in hh i now estimate two models with the more common assumptions of linear demand and additive and normally distributed errors both with and without a modification for

long run study of residential water consumption the estimation of dynamic models and themeasure of long run effects arerare in residential water demand studies weshow in this paper that a dynamicmodel of water consumption can be derived froma structural optimisation programsolved by local communities thisnonlinear model is estimated on asample of french municipalities and is foundasymptotically equivalent to a dynamic panel data model that is linear in theparameters the latter includes anoriginal error component structure that allowsfor a flexible heterogeneity pattern including both the usual idiosyncraticeffect and an additional individualeffect affected by a multiplicative time varyingparameter as usual gmm estimators for panel data are not consistent inthis case we propose a new gmmprocedure that yields consistent and efficientestimates of short and long runprice elasticities respectively 0 26 and 0 40

an empirical survey of residential water demand modelling abstract the increased reliance on demand side management policies as an urban water consumption management tool has stimulated considerable debate among economists water utility managers regulators consumer interest groups and policymakers in turn this has fostered an increasing volume of literature aimed at providing best practice estimates of price and income elasticities quantifying the impact of non price water restrictions and gauging the impact of non discretionary environmental factors affecting residential water demand this paper provides a synoptic survey of empirical residential water demand analyses conducted in the last 25 years both model specification and estimation and the outcomes of the analyses are discussed

parental leave a policy evaluation of the swedish daddy month reform abstract many governments are making attempts to increase fathers share of parental leave in order to correct for unequal labor market outcomes using swedish data we ask whether fathers can be encouraged to take more parental leave in order to mitigate the negative consequences of mothers career interruptions the unique data stem from a reform of parental leave resulting in a clean natural experiment data comprise all children born before control group and after treatment group the date of implementation of the reform in cohorts of up to 27 000 newborns mothers and fathers we find strong short term effects of the incentives on male parental leave but no behavioral effects in the household fathers in the treatment group do not take larger shares of the leave taken for care of sick children which is our measure for household work we also investigate a second data set on fathers and mothers long term wages and employment without finding evidence for substantial effects of the reform

how do urban households in china respond to increasing block pricing in electricity evidence from a fuzzy regression discontinuity approach abstract china is the largest electricity consumption country after it has passed the united states in 2011 residential electricity consumption in china grew by 381 35 12 85 per annum between 2000 and 2013 in order to deal with rapid growth in residential electricity consumption an increasing block pricing policy was introduced for residential electricity consumers in china on july 1st 2012 using difference in differences models with a fuzzy regression discontinuity design we estimate a causal effect of price on electricity consumption for urban households during the introduction of increasing block pricing policy in guangdong province of china we find that consumers do not respond to a smaller approximately 8 increase in marginal price however consumers do respond to a larger increase in marginal price an approximately 40 increase in marginal price induces an approximately 35 decrease in electricity use 284 kw h per month our results suggest that although the increasing block pricing could affect the behavior of households with higher electricity use there is only a limit potential to overall energy conservation

climate change adaptation a study of fuel choice and consumption in the us energy sector abstract using cross sectional data this paper estimates a national energy model of fuel choice by both households and firms consumers in warmer locations rely relatively more heavily on electricity rather than natural gas oil and other fuels they also use more energy climate change will likely increase electricity consumption on cooling but reduce the use of other fuels for heating on net american energy expenditures will likely increase resulting in welfare damages that increase as temperatures rise for example if the us warms by 5 c by 2100 we predict annual welfare losses of 57 billion

household water demand seasonal elasticities a stone geary model under an increasing block rate structure using household level panel data from tucson arizona and a unique set of highly disaggregated control variables we estimate residential demand for water via a stone geary specification the stone geary functional form allows price elasticity of demand to vary with quantity consumed price and income and enables estimation of a threshold level of consumption below which demand is considered perfectly price inelastic an encompassing test of consumer price response reveals evidence favoring a lagged average price specification rather than one using lagged marginal price the estimated model also finds substantial seasonal variation in price elasticity and declining consumer price responsiveness

demand and distributional effects of water pricing policies abstract worldwide water scarcity threatens delivery of water to urban centers water pricing is often recommended to reduce demand in this paper demand and distributional effects of water pricing policies are examined in a block pricing model that is applied to the metropolitan region of sao paulo water demand functions are estimated using marginal and average price models based on monthly data for the period 1997 2002 price elasticities of water demand range between 0 45 and 0 50 and income elasticities between 0 39 and 0 42 for the current combined regressive progressive block price system the poor spend almost 4 2 to 4 7 of their income on water the rich only pay 0 4 to 0 5 of their income whereas they consume more than twice as much a progressive block price or an income dependent price system may result in a more equalized income distribution however the analysis shows that there is a trade off between a more equalized income distribution and revenues earned by the water company more pro poor pricing systems may result as well in lower revenues for the water company

price knowledge in household demand for utility services a household s decision to acquire price knowledge is endogenous in the demand for utility services and may affect elasticities and consumption levels a simultaneous equation model with endogenous switching is developed to evaluate the effects of price knowledge and other sources of heterogeneity results indicate informed households were more responsive to average and marginal price signals informed households also use less water but this is due to heterogeneity rather than price knowledge controlling for heterogeneity price knowledge actually increases monthly water usage the implications of accounting for differences in price knowledge in utility demand modeling and demand management policy are discussed

evaluating the influence of increasing block tariffs in residential gas sector using agent based computational economics abstract designing a desirable increasing block tariff for the residential gas retail market has been a challenging task for regulated utilities especially in china to deal with such problems in this paper we establish an agent based computational economics system to provide a formal evaluation of the direct and indirect influences of several issued increasing block tariffs in the residential gas market moreover a comprehensive demand response behaviour model has been improved in term of price elasticity while still coping with income levels and complex social environment we also compute and compare the outcomes of several increasing block tariffs with the initial flat tariff by running the system on a test case using real world data from a middle scale gas retail market in wuhan the results indicate that there is an appropriate increasing block gas tariff scheme that has greater ability to improve social equity while still ensuring operator revenue and promoting gas conservation in order to offset the limitations of the proposed increasing block tariffs the regulator should adopt some complementary measures such as applying appropriate policies targeting the intended consumers and allowing large families to obtain extra allowance of volume

the sustainable residential water use sustainability efficiency and social equity the european experience abstract the present paper traces the operational conditions governing the sustainable use of water in cities towards this objective the paper first proposes a new comprehensive definition for the sustainable use of water next efficiency in use is proposed as a fundamental instrument in achieving sustainability in spite of prevailing opinions maintaining that sustainability and efficiency aim at different and probably conflicting objectives in this light several pricing modes that inhibit efficiency are examined and their effects are defined in this context egalitarian pricing which nevertheless prevents efficiency is also systematically evaluated until it is ascertained that it does not serve social equity in the use of water in the long run all the more the present paper advocates that certain egalitarian pricing systems such as the increasing block rates most prevalent at this time may have the reverse effect than the one intended and hence in the long run impose negative impacts on the welfare of low incomes as a result full cost prices are proposed as a necessary instrument for the sustainable use of water an instrument that promotes social equity in the long run the assumptions of the study are examined in a comparative analysis of representative european pricing systems and urban management modes

energy demand with declining rate schedules an econometric model for the u s commercial sector we specify and estimate a model of the demand for electricity and natural gas in commercial buildings using data from the commercial building energy consumption survey although not observed declining rate schedules are approximated by a downward sloping function fitted to billing data for individual survey units marginal prices rates temperature variables and a large number of building characteristics are incorporated into the model as explanatory variables demand and rate schedule equations constitute a simultaneous system with prices and quantities jointly determined the effects on price elasticities of using endogenous marginal rather than exogenous average prices are estimated to be quite large

energy consumption for space heating a discrete continuous approach energy demand for space heating is estimated using a discrete continuous choice model which focuses on the relationship between the choice of heating equipment and energy consumption the model is estimated on norwegian micro data and the two stages of the model are estimated simultaneously the capital cost and the operating cost of the heating systems are both found to have a significant impact on the choice of heating system furthermore the results show that household characteristics are important variables in residential energy models energy price elasticities and income elasticities are also estimated

causal effects of paternity leave on children and parents reserving a share of the parental leave period for fathers is considered necessary in order to induce fathers to take leave and to increase men s participation in child rearing we investigate how a parental leave reform directed towards fathers affected leave taking and in turn children s and parents long term outcomes a paternal leave quota greatly increases the share of men taking paternity leave we find evidence that children s school performance improves as a result particularly in families where the father has higher education than the mother we find no evidence that paternity leave counters the traditional allocation of parents labor supply

urban residential demand for water in the united states further discussion using a new model formulation and data from a sample of colorado utilities we investigated the price specification controversy marginal price versus average revenue when estimating residential water demand the improved statistical fit using average

the econometrics of piecewise linear budget constraints a survey and exposition of the maximum likelihood method in this article maximum likelihood techniques for estimating consumer demand functions when budget constraints are piecewise linear are exposited and surveyed consumer demand functions are formally derived under such constraints and it is shown that the functions are themselves nonlinear as a result the econometric problems in estimating such functions are exposited and the importance of the stochastic specification is stressed in particular the specification of both unobserved heterogeneity of preferences and measurement error econometric issues in estimation and testing are discussed and the results of the studies that have been conducted to date are surveyed

reconsidering the economics of demand analysis with kinked budget constraints this paper has two objectives first we identify a problem with the ability of the discrete continuous choice framework and conditional demand functions to fully describe consumer preferences in the presence of kinked budget constraints second we propose and illustrate an alternative preference based method for estimating consumer responses to price changes under these conditions this framework recognizes that commitments to commodities such as pools or outdoor landscaping influence how water consumption responds to price changes as part of the long run consumption adjustments with microdata on household choices this approach could be used to design increasing block rate structures that recognize the differences in water consumption responses with these commitments

the value of scarce water measuring the inefficiency of municipal regulations abstract rather than allowing urban water prices to reflect scarcity rents during periods of drought induced excess demand policy makers have mandated command and control approaches primarily rationing the use of water outdoors while such policies are ubiquitous and likely inefficient economists have not had access to sufficient data to estimate their economic impact using unique panel data on residential end uses of water in 11 north american cities we examine the welfare implications of urban water rationing in response to drought using estimates of expected marginal prices that vary both across and within markets we estimate price elasticities specific to indoor and outdoor water use our results suggest that current policies do target water uses that households themselves are most willing to forgo nevertheless we find that rationing outdoor water in cities has costly welfare implications primarily due to household heterogeneity in willingness to pay for scarce water we find that replacing rationing policies with a market clearing drought price would result in welfare gains of more than 29 of what households in the sample spend each year on water

measuring price elasticities for residential water demand with limited information this paper exploits the seasonal and annual changes in marginal prices for water to estimate the price elasticity of demand by residential households for water it uses the changes in distributions of water used at the census block group levels in response to changes in marginal prices of water for matched months across years this strategy reduces the interaction effects of outdoor use and demographic factors in determining responsiveness to price by comparing years that vary in overall water availability the framework can recover measures of how responses to price vary with season and drought conditions the application is the urban phoenix metropolitan area jel h42 q25

the residential water demand effect of increasing block rate water budgets we investigate the effect of introducing a fiscally neutral increasing block rate water budget price structure on residential water demand we estimate that demand was reduced by around 17 although the reduction was achieved gradually over more than three years as intermediate steps we derive estimates of price and income elasticities that rely only on longitudinal variability we investigate how different subpopulations responded to the pricing change and find evidence that marginal rather than average prices may be driving consumption we also derive alternative rate structures that might have been implemented and assess their estimated demand effects

consistent estimation of the impact of tax deductibility on the level of charitable contributions when charitable contributions are tax deductible the marginal price of charitable giving in other consumption foregone per dollar of contributions is generally less than unity further if the income tax schedule is a progressive step function the marginal price of contributions is generally a rising step function of the level of contributions the problem of estimating a contributions demand function for individuals is therefore complicated by the spurious correlation between the level of contributions and the observed marginal price we take this econometric problem into account in estimating a contributions demand function using data from the 1972 73 consumer expenditure survey after comparing our results with those of estimation techniques used by other authors we provide evidence on the impacts of alternative tax policies on charitable giving using our estimates of the model parameters

water demand under alternative price structures we estimate the price elasticity of water demand with household level data structurally modeling the piecewise linear budget constraints imposed by increasing block pricing we develop a mathematical expression for the unconditional price elasticity of demand under increasing block prices and compare conditional and unconditional elasticities analytically and empirically we test the hypothesis that price elasticity may depend on price structure beyond technical differences in elasticity concepts due to the possibility of endogenous utility price structure choice observed differences in elasticity across price structures may be due either to a behavioral response to price structure or to underlying heterogeneity among water utility service areas

block rate versus uniform water pricing in agriculture an empirical analysis in this article we adapt burtless and hausman s 1978 methodology in order to estimate farmers demand for irrigation water under increasing block rate tariffs and empirically assess its effect on aggregate demand and inter farm allocation efficiency this methodology overcomes the technical challenges raised by increasing block rate pricing and accounts for both observed and unobserved technological heterogeneity among farmers employing micro panel data documenting irrigation levels and prices in 185 israeli agricultural communities in the period 1992 1997 we estimate water demand elasticity at 0 3 in the short run the effect of a price change on demand within a year of implementation and 0 46 in the long run we also find that in accordance with common belief switching from a single to a block price regime yields a 7 reduction in average water use while maintaining the same average price however based on our simulations we estimate that the switch to block prices will result in a loss of approximately 1 of agricultural output due to inter farm allocation inefficiencies

comparing residential water demand estimates under decreasing and increasing block rates using household data using a new model formulation and data from a sample of colorado utilities we investigated the price specification controversy marginal price versus average revenue when estimating residential water demand the improved statistical fit using average

welfare and distribution effects of water pricing policies in this paper distribution and welfare effects of changes in block price systems are evaluated a method is discussed to determine for a marshallian demand function equivalent variation in case of a block price system the method is applied to compare for the metropolitan region of sao paulo alternative pricing policies on the basis of their demand welfare and distribution effects of changing water prices results show that there is a trade off between average welfare and income distribution a pro poor price system may result in lower average welfare than a flat price system but in higher individual welfare for the poor moreover there is a trade off between revenues for the water company and income distribution even though pro poor price systems may not be as good for average welfare as flat price systems their direct effects on poverty are important introducing pro poor price systems however may have financial consequences for the water companies

an econometric estimation of industrial water demand in france this study investigates the structure of industrial water demand byestimating the derived demand for water on a sample of industrialestablishments located in the south west of france productiontechnologies are represented by short term variable cost functions andapproximated by a translog form industrial water use is modeled ashaving three components the quantity of water bought to a waterutility the quantity of autonomous water and the quantity of watertreated prior to use we include in this framework water effluents which are considered as a by product of the production process emittedby firms each of the three water components is treated as a separateinput and all are estimated as a system of simultaneous equations themodel is estimated on a sample of 51 industrial plants in the girondedistrict observed from 1994 to 1996 using seemingly unrelated regression sur and feasible generalized least squares fgls results ofestimations show that industrial firms are sensitive to water priceinputs network water elasticity is estimated at 0 29 it variesfrom 0 10 to 0 79 according to the type of industryconsidered autonomous water price elasticity is not significant elasticity for treated water is evaluated at 1 42 at themean sample and varies from 0 90 to 2 21 according to theindustry considered

policy cognition is more effective than step tariff in promoting electricity saving behaviour of residents abstract as a demand response plan the step tariff policy for electricity has been fully implemented for several years in china however it is not clear whether the step tariff policy for electricity is effective therefore we analysed and compared the effectiveness of step tariff policy from two aspects step tariff and policy cognition specifically combining macro scale statistical data and microscopic research data we constructed a regression discontinuity design and binary response model first we tested the correction effect of the step tariff to residential electricity consumption behaviour further combined with cognitive behavioural theory we analysed the role of policy cognition in the occurrence of electricity saving behaviour finally based on the cognitive evaluation theory the impact of residents heterogeneity on their cognitive differences was identified the specific conclusions are as follows 1 the step tariff based on the ramsay strategy cannot effectively correct electricity consumption behaviours as expected 2 compared with the step tariff construction of correct policy cognition has a more significant effect on changing the customary behaviour of electricity consumption 3 policy cognition of residents is heterogeneous and groups with weak policy cognition are accurately identified

household electricity and gas consumption for heating homes energy consumption has been drastically changed because of energy source depletion price fluctuations development and penetration of alternative energy sources and government policies household energy sources are interrelated and energy price and household characteristics such as income level and dwelling size affect the usage to supply energy consistently and achieve a balance between production and consumption stakeholders must understand consumer energy consumption behavior therefore this study identifies household heating energy usage patterns and the substitutive and or complementary relationships between electricity and gas based on a multiple discrete continuous extreme value model household utility structure is identified from data on gas heating usage results show greater utility and the smallest satiation values for gas boilers than for electric heaters and electric heating beds the effects of consumer socioeconomic and environmental characteristics on the choice of heating energy sources were analyzed also for further comparison the respondents were split into high and low categories for income heating degree days dwelling size and gas usage gas was found to be the most economical heating choice for households

estimating water demand under increasing block tariffs using aggregate data and proportions of users per block forming a strategy for the management of a water resource requires reasonable knowledge of the effects that alterations in the control variables bring on water use such knowledge of the determinants influencing domestic water demand constitutes an essential ingredient of a pricing policy for domestic water supply special attention should be paid to the effects of the level shape and frequency of the tariff since these are the variables that can be altered by the policy maker

perception of price when price information is costly evidence from residential electricity demand a bstract residential electricity consumption is an example of a good for which it is costly to determine marginal price since price changes with the quantity purchased according to multistep block rate schedules this paper investigates the effect of the price information problem on consumers price perceptions an alternative hypothesis of average price perception is tested against the marginal price postulate which assumes wellinformed consumers the model which includes a price perception variable allows the estimation of the price to which consumers actually respond the empirical results support the hypothesis that consumers respond to average price perceived from the electricity bill

environmental regulation of households an empirical review of economic and psychological factors abstract the literature on sustainable consumption and environmental regulation of household behavior is dominated by conceptual and normative approaches as a result many suggestions lack a firm empirical basis to overcome this deficiency econometric studies in three areas of environmentally relevant activities of households are reviewed residential use of energy generation of solid waste and recycling and residential use of water next to price and income elasticities attention is devoted to individual socio economic features and psychological factors such as attitudes knowledge perceptions and values potential psychological determinants and related insights are further examined by discussing a range of representative and illustrative statistical psychological studies of environmental behavior one important general finding is that there are very few empirical studies that systematically combine socio economic and psychological determinants a range of insights for environmental policy is derived and research recommendations are offered

audit selection and income tax underreporting in the tax compliance game abstract this paper uses a game theoretic model of the tax compliance game to estimate a model of audit selection and income tax underreporting in jamaica the empirical analysis make use of audited tax returns for individual taxpayers and a random sample of tax returns for the population from which the audited returns are selected the estimation results strongly indicate a nonrandom audit strategy and thus provide support for the game theoretic approach the results also indicate that the probability of underreporting and the level of underreporting are positively related to the marginal tax rate and to income and negatively related to marginal payroll tax benefits in general the underreporting elasticities are small

increasing block rate tariffs as faulty transmitters of marginal willingness to pay econometric demand estimation is conducted under the assumption that market prices provide accurate signals of consumers marginal willingness to pay for associated observed quantities demanded but increasing block rate tariffs are faulty transmitters of marginal willingness to pay mwtp the problem arises because consumers may not be able to adjust quantity demanded so as to equate mwtp with price under such tariffs price increases discretely at the block boundaries and at the rate of consumption associated with a block boundary a consumer s mwtp may exceed the price in the preceding block but be less than the price in the next block thus such a consumer would consume at the quantity associated with the boundary with observed mwtp i e the price in the preceding block less than true mwtp the observed marginal price is an erroneous measure of mwtp for those consumers falling into this price gap and these measurement errors are neither independent of the mwtp nor do they have a zero mean as a consequence the estimated parameters of demand functions for goods sold under increasing block rate tariffs are likely to be biased hypotheses tests concerning the parameters are likely to be invalid and estimated price and income elasticities in error the faulty transmitter problem may also explain in part the failure to obtain hypothesized results in most demand studies using a taylor nordin demand specification 1 in the next section the faulty transmitter problem is described a demand model is specified for a simple case and the biases in the estimated parameters resulting from the errors in the observed marginal prices are examined for predictions as to direction then follows a description of a simulation conducted using tariffs and aggregate data for 19 wisconsin communities to examine the direction and magnitude of these biases in an empirical residential water demand study the biases are examined for demand functions estimated using both micro data and aggregate community level data finally some conjecture on methods of circumventing the faulty transmitter problem is offered

price and income elasticities of residential water demand a meta analysis this article presents a meta analysis of variations in price and income elasticities of residential water demand meta analysis constitutes an adequate tool to synthesize research results by means of an analysis of the variation in empirical estimates reported in the literature we link the variation in estimated elasticities to differences in theoretical microeconomic choice approaches differences in spatial and temporal dynamics as well as differences in research design of the underlying studies the occurrence of increasing or decreasing block rate systems turns out to be important with respect to price elasticities the use of the discrete continuous choice approach is relevant in explaining observed differences

instrumental variables approach to rural water service demand interest in empirical studies of the demand for goods sold through discrete pricing structures has grown since nordin suggested a modification of taylor s demand model 24 29 the bulk of early empirical research centered on residential electricity demand however econometric studies of water demand have proliferated in recent years some articles have been concerned in part with the proper theoretical specification of demand equations incorporating block rate pricing schedules taylor specified price as being composed of the marginal price associated with the block in which consumption occurs and an average price 29 nordin modified taylor s specification by demonstrating utility maximizing consumers with perfect information respond to marginal price along with a lump sum income effect associated with intramarginal prices and price schedule breakpoints 24 there is a potential problem in the estimation of demand for goods sold through block rate pricing schemes because of the possibility of correlation between price variables and the error structure 29 there are then two issues associated with the study of demand for goods sold under discrete pricing mechanisms the first issue is whether if consumers are aware of block pricing structures and respond to marginal price and the lump sum income change or rate premium or are aware of only total spending and total consumption and respond to an average price 11 5 9 26 the second issue is the choice of estimating technique 4 14 20 31 25 these two issues are not unrelated since empirical validation of consumer behavior

the value of free water analyzing south africa s free basic water policy this paper analyzes south africa s free basic water policy under which households receive a free water allowance equal to the world health organization s recommended minimum of 6 kiloliters per month i structurally estimate residential water demand evaluate the welfare eects of free water and provide optimal price schedules derived from a social planner s problem i use a unique dataset of monthly metered billing data for 60 000 households for 2002 2008 from a particularly disadvantaged suburb of pretoria the dataset contains rich price variation across 18 dierent nonlinear tarischedules and includes a policy experiment which removed the free allowance i nd that without government subsidy the mean monthly consumption would decrease from 12 6 to 5 6 kiloliters which is below the clean water consumption recommended by the who however it is possible to reallocate the current subsidy to form an optimal tari without a free allowance which would increase welfare while leaving the water provider s revenue unchanged this optimal tariwould also reduce the number of households consuming below the who recommended level

household responses to increased water rates during the california drought this paper explores the use of fixed effects and maximum likelihood techniques to es timate household responses to water price in creases during the california drought estimates are based on bimonthly meter readings from 599 single family households in the alameda county water district over the period 1982 1992 before and after the introduction of a steeply increasing block rate price structure i find that household and monthly fixed effects models are not success ful in modeling water demand with these data however maximum likelihood models that ex plicitly consider the household s response to the rate structure result in plausible estimates of wa ter demand jel q25

evidence on the specification of price in the study of domestic water demand the development of lakefront property in northern wisconsin has prompted in several towns minimum frontage zoning stricter than the state standard such zoning generates an economic loss by constraining development development effect and an economic

information provision and consumer behavior a natural experiment in billing frequency abstract in this study i estimate a causal effect of increased billing frequency on consumer behavior i exploit a natural experiment in which residential water customers switched exogenously from bimonthly to monthly billing customers increase consumption by 3 5 5 in response to more frequent information this result is reconciled in models of price and quantity uncertainty where increases in billing frequency reduce the distortion in consumer perceptions using treatment effects as sufficient statistics i calculate consumer welfare gains equivalent to 0 5 1 of annual water expenditures heterogeneous treatment effects suggest increases in outdoor water use

residential water demand in the northwest of spain a panel of monthly aggregate data from the northwest of spain is used to estimate domestic water demand functions under linear and non linear tariffs price billing climatic and sociodemographic variables are used as explanatory variables the use of intraannual data constitutes a relevant contribution in the european context overall marginal price elasticity estimates lie between 0 12 and 0 17 summer only elasticities and elasticities associated with uses beyond the effectively free allowances seem significantly higher climatic variables significantly affect monthly use although probably less than in other wealthier and drier areas domestic water use appears to be a normal good

potential for pricing policies in water resource management estimation of urban residential water demand in zaragoza spain this paper presents an empirical study to estimate the urban residential water demand in zaragoza spain this allows the testing of the short run sensitivity of water demand to changes in a set of