estimating residential water demand under multi part tariffs using aggregate 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

economies of scope and economies of agglomeration abstract agglomeration economies are economies external to the firm and plant but internal to a particular location in this paper the notion of agglomeration economies is formally investigated the implications of the concept for urban structure and industrial organization are then traced under specified considerations weak economies of agglomeration as defined in this paper are shown to be necessary for the existence of an urban area

specifying the dynamics of industry concentration previous studies generally explain changes in concentration by its initial determinants or by changes in its determinants little attention is paid to the dynamic structure of the model this study provides a framework to sort out adjustment effects in a systematic manner the empirical model distinguishes long term from short term effects and estimates the rate of adjustment when concentration deviates from its long term equilibrium level considerable attention has focused on industry concentration as a key element of market structure while earlier empirical studies examined determinants of the level of industry concentration a more recent literature focuses on changes in concentration these more recent papers typically explain intertemporal changes in concentration by the past levels of industry growth concentration advertising intensity and minimum efficient plant size however the dynamic relationship between changes in concentration and the levels of the independent variables has not been explicitly specified caves and porter 1980 have argued that explaining changes in concentration by past levels of market structure variables is tantamount to assuming that the sampled industries are in the process of adjusting to a disequilibrium situation as an alternative they adopt a long term equilibrium approach whereby changes in concentration are explained by lagged changes in the relevant market conditions they find that this approach as a whole was unsuccessful exhibiting low levels of significance and a lack of robustness when the cross section regressions were shifted to different time periods

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

advertising sunk costs and barriers to entry this paper tests hypotheses about the entry deterring effects of advertising the model isolates three separate effects of advertising on entry the effect on the irrecoverable costs of entry the effect on the uncertainty underlying the entry environment and the effect on the measured rates of profit we find that advertising impedes entry since necessary advertising expenditures give rise to a sunk cost which raises the risk of entry however we also find a countervailing force due to advertising in that the entrant perceives a greater likelihood of success in markets where advertising is important our analysis shows that the overall impact of advertising on entry is positive

informational rigidities and the stickiness of temporary sales abstract how do retailers react to cost changes while temporary sales account for 95 of price change in our data retail prices respond to a wholesale cost increase entirely through the regular price sales actually respond temporarily in the opposite direction from regular prices as though to conceal the price hike additional evidence from responses to commodity cost and local unemployment shocks as well as broader evidence from bls data reinforces these findings institutional evidence indicates that sales are complex contingent contracts determined substantially in advance in a standard price discrimination model these institutional practices leave little money on the table

price changes supply elasticities industry organization and dairy output distribution long run price elasticities of milk supply are decomposed into price elasticities of yield herd size and farm population for northeastern u s dairy farms these elasticities are shown to vary with farm size because of size related differences in capital intensity specialization yield and herd size variability and rates of entry exit into dairy in the short run price responsiveness is shown to decrease with farm size in the long run large farms are shown to be most price responsive results suggest that lower milk prices could make revenue distribution less equal in both the short and long run by altering output and population distributions

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

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

estimation of residential water demand with imperfect price perception using data from a household survey carried out in the french overseas territory of reunion we investigate the price of drinking water perceived by households faced with an increasing multi step pricing scheme to this purpose we use an improved version of the method introduced by shin 1985 to estimate the demand for residential water when consumers are imperfectly informed about their pricing schedule the empirical results suggest that reunion households underestimate the price of water and thus consume more than what is economically rational providing information to households about the marginal price of water may be an innovative means of inducing them to respond to pricing policies designed to promote water conservation

looking backward to look forward water use and economic growth from a long term perspective recent research has examined the relationship between natural resources and economic growth considered vitally important not only for humanity s well being but also for the integrity of the ecosystem the relationship between water use and economic growth has nevertheless traditionally attracted little attention by analysts this article studies water use trends from 1900 to 2000 throughout the world and their relationship to the main determinants of economic growth to do this we first analyse water use trajectories second to proceed with the determinants of water use we reformulate the ehrlich and holdren s impact population affluence technology ipat equation 1971 decomposing water use trends into changes in economic demands and in water use intensity on the basis of a decomposition analysis finally a simple scenario analysis is conducted to project future water use trends under different economic demographic and technological assumptions the empirical evidence shows that economic and

irresponsible lending with a better informed lender we present a simple model of personal finance in which an incumbent lender has an information advantage vis a vis both potential competitors and households in order to extract more consumer surplus a lender with sufficient market power may engage in irresponsible lending approving credit even if this is knowingly against a household s best interest unless rival lenders are equally well informed competition may reduce welfare this holds in particular if less informed rivals can free ride on the incumbent s superior screening ability this article proposes a new framework for analysing household or consumer lending using its past experience with borrowers in the same local area or borrowers facing similar economic conditions a sophisticated lender may often have a better estimate of a household s default probability than the household itself i derive the conditions where such information asymmetry can lead to irresponsible or too aggressive lending in which case credit is approved even though this is knowingly against a household s best interest admittedly the more standard approach is to assume that borrowers represent the better informed party while we do not want to dismiss the importance of borrower adverse selection the presumption that sophisticated and experienced lenders can estimate the default probability better than individual borrowers may be particularly suitable if borrowers are households individual households may not have statistically accurate information about the likelihood of say losing their job in an economic downturn or of incurring large medical bills in the future both of which may cause them to default on a loan on the other hand we do not presume that households own estimates are biased on average i borrow the assumption of informed lending from inderst and m ller 2006 where a lender is better informed about the expected cash flow from a newly financed project my current analysis is tailored instead towards household finance and my focus is on whether too aggressive lending can occur in equilibrium this focus is motivated by the particular attention that policy makers have given to this issue for instance in the uk various reports and taskforces on consumer lending practices and more generally on the surge of household debt have brought up

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

strategic entry deterrence in analyzing deterrence of large scale entry two classes of entry barriers may be distinguished an innocent entry barrier is unintentionally erected as a side effect of innocent profit maximization in contrast a strategic entry barrier is purposely erected to reduce the possibility of entry two types of innocent barriers may also be distinguished a postentry absolute advantage has the property that if entry did occur the established firm would be at a profit advantage over the entrant examples are superior technology or product design patents and lower input prices a preentry asymmetry advantage arises from the fundamental preentry asymmetry between established firm and potential entrant before the entrant makes his entry decision the established firm has already committed resources this prior existence gives first move advantages the preentry asymmetry is independent of symmetry or asymmetry in the rules the equilibrium concept of the postentry game that might ensue even if the postentry game will be played according to nash cournot or entrant as leader rules the preentry leadership

determinants of residential water demand in germany abstract we econometrically analyze the impact of several economic environmental and social determinants for the per capita demand for water in about 600 water supply areas in germany besides prices income and household size we consider the effects of population age the share of wells housing patterns precipitation and temperature we also explore why current per capita residential water consumption in the new federal states is about 30 lower than in the old federal states since average cost pricing may cause an endogeneity problem we apply instrumental variable procedures in addition to single equation ordinary least squares but find no evidence that prices are endogenous our estimation results suggest that the price elasticity of water demand in germany is around 0 24 the income elasticity is positive decreases with higher income levels and is at least three times higher in the new federal states than in the old federal states current differences in prices and income levels explain about one third of the gap in residential water use between the two regions household size and the share of wells have a negative impact on per capita water demand and water use increases with age finally the findings provide some evidence that rainfall patterns rather than total rainfall affect water consumption while temperature appears to have no impact at all all outcomes are robust to a log log and two types of semi log specifications for the water demand function

evaluating the welfare effects of reforming municipal water prices abstract despite the strong criticisms by economists of water utility pricing practices and the presence of well articulated theoretical models of efficient pricing alternatives few empirical studies have documented the magnitude of the efficiency gains from altering water prices the structures of water supply costs and water demands are estimated using data from vancouver canada a simulation program uses these estimated relationships to compute the impact upon a representative water utility s output and deficit and upon aggregate consumer surplus of a move from its current practice to efficient prices simulation results show that a move to seasonally differentiated pricing with an annual charge calculated to recoup the resulting deficit raises aggregate surplus by approximately 4 this result contrasts with recent water pricing studies that found welfare improvements of approximately 1

a closer look at the effect of market growth on industries profits everybody talks about the relation of industries profit rates to their markets rates of growth but nobody does anything about it specifically researchers have confirmed the effect of the growth of nominal output on profits in many multivariate studies without specifying closely the hypothesis under test or the measure of demand growth appropriate to test it a profits growth relationship could stem from several mechanisms the lagged adaptation of capacity to unexpected changes in demand reactions of oligopolists to disturbances in their consensus etc these mechanisms how and where they work hold their own normative interest therefore knowing what behavior and what structure lying behind it accounts for the profits growth relationship should do more than improve the specifications of our studies of allocative efficiency it should also expand our knowledge of adaptive processes that are important and hard to observe directly in this paper we shall synthesize the available explanations of why changes in market demand should affect an industry s profits then present a statistical test of the relative significance of the competing explanations

revenue neutral tax policies under price uncertainty comment in an interesting paper in this journal holloway investigated the firm s response to revenue neutral taxation under price uncertainty in his analysis revenue neutral policies adjust simultaneously the marginal tax rate and the level of exemptions while keeping expected tax receipts constant using an assumption of nonincreasing absolute risk aversion he concluded that a reduction in the marginal rate would cause the firm to contract output holloway used the 1986 tax reform act as an example of a revenue neutral policy as a matter of fact the act was intended to be revenue neutral while low

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

sunk capacity costs long run fixed costs and entry deterrence under complete and incomplete information this article considers a three stage extensive form game where capacity once installed is sunk but where fixed costs are not sunk we show that there may be multiple perfect equilibria of the complete information game when the entrant is incompletely informed about the incumbent s cost the entrant may use the incumbent s capacity choice as a signal of the incumbent s cost we present an example where the incumbent prefers a noninformative capacity signal since this has the effect of reducing the scale of entry we present a second example where the entrant is incompletely informed because the incumbent makes a choice over production technologies that is unobservable to the entrant

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

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

residential water demand responds asymmetrically to rising and falling prices this paper econometrically estimates residential water consumption in germany between 2007 and 2013 based on a panel of almost 3000 supply areas in particular the analysis distinguishes periods o

games of survival in the us newspaper industry 1989 games of survival in the us newspaper industry applied economics vol 21 no 5 pp 631 649

the long run performance of increasing block pricing in taiwan s residential electricity sector abstract this article examines the performance regarding efficiency and equity of increasing block pricing ibp in taiwan s residential electricity sector by using long term nationwide household data 1999 2014 actual variations in ibp rate structure are explored empirical results show that cross subsidization under ibp have resulted in inefficient over consumption by the poor and inefficient under consumption by the rich in addition the financial burden increased with decreases of household s income levels and a relatively high percentage of subsidies mistakenly went to non poor households the upward price adjustments and broadened first block in recent years have increased the household s financial burden and the rates of wrongly excluding the poor and wrongly including the rich to enjoy the subsidy being unable to take family size into consideration and send correct price signals to all users are two serious problems for ibp which may hinder the achievement of equity and efficiency in electricity use

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

do residential water demand side management policies measure up an analysis of eight california water agencies abstract to assess the potential of price and alternative demand side management dsm policies as an urban water resource management tool an econometric model of residential demand is formulated and estimated this econometric model incorporates alternative dsm policy instruments such as water allocations use restrictions public education and increasing block pricing schedules the analysis relies on cross sectional monthly time series data for eight water agencies in california representing 24 of the state s population 7 1 million people results suggest that both price and alternative dsm policies were effective in reducing demand however the magnitude of the reduction in demand varied among policy instruments

urban water demand with periodic error correction monthly demand for publicly supplied water to u s residences and businesses is estimated from a 10 year panel of 167 cities a periodic error correction model integrates monthly annual and long run time scales statistical consistency is validated by unit root tests adapted to the monthly frequency water and wastewater price elasticity of demand is estimated by sector calendar month and time horizon

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

fixed costs sunk costs entry barriers and sustainability of monopoly this paper shows that i fixed costs of sufficient magnitude assure the existence of a vector of sustainable prices for the products of a natural monopolist prices making him invulnerable against entry ii nevertheless fixed costs do not constitute barriers to entry that is they need not have undesirable welfare consequences iii indeed in market forms that we call perfectly contestable large fixed costs are completely compatible with many desirable attributes of competitive equilibrium iv sunk costs do however constitute barriers to entry and v finally the profit and welfare consequences of entry barriers are described formally in this paper it is shown that i fixed costs of sufficient magnitude assure the existence of a vector of sustainable prices a set of product prices that make a natural monopolist invulnerable against successful entry ii nevertheless costs that are truly fixed do not constitute barriers to entry that is they do not have the welfare consequences normally attributed to barriers to entry iii indeed there are markets of a form which we call perfectly contestable markets and whose properties may be approximated in practice in which large fixed costs are completely compatible with many if not most of the desirable attributes of competitive equilibrium iv sunk costs do however constitute barriers to entry and v finally the resource allocation problems that stem from fixed costs are formally identical with those that accompany public goods both their sources and their character are the same thus the rationale for public supply of public goods may be no different from that pertaining to nationalization of natural monopolies