2014/10/03 by Kenneth A. Baerenklau, Kurt A. Schwabe, K. Schwabe +1 · 4 citations
Economics, Econometrics and Finance · Engineering · Environmental Science · #Housing Market and Economics #Water resources management and optimization #Water-Energy-Food Nexus Studies
paper · doi:10.3368/le.90.4.683
crossref issued 2014/10/03 · crossref published 2014/10/03 · crossref published-online 2014/10/03 · openalex publication_date 2014/10/03 · crossref published-print 2014/11/01 · crossref created 2015/07/30 · crossref deposited 2024/09/26 · openalex created_date 2025/10/10 · crossref indexed 2026/07/28 · openalex updated_date 2026/07/31
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. <i>(JEL Q25)</i>