An annual quasidifference approach to water price elasticity

Bell, David; Griffin, Ronald C.

doi:10.1029/2007wr006233

Cited by 11 publications

(4 citation statements)

References 35 publications

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“…The objective contains terms for agricultural sector costs/sales, M&I water/energy demands, project and generation facility construction costs, and water and energy supply operational costs. On the demand side, we include: (a) county‐level water demand curves for the municipal and industrial sectors that are downward sloping with constant elasticities using elasticity estimates from Bell and Griffin (2008) and Cai (2009) as shown in Table S2 in Appendix S3 that are passed through observed 2020 price and consumption levels; (b) constant elasticity county electricity demand curves. (c) fixed water demands for fracking and (d) fixed price agricultural sales possibilities.…”

Section: Methodsmentioning

confidence: 99%

Impacts of climate change on water management

Fei

McCarl

Yang

et al. 2022

Applied Eco Perspectives Pol

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Climate change and increasing demands are stressing water allocation. In many places, water reallocation and expensive water development actions are being undertaken with more likely to be stimulated by climate change.Here we examine reallocation and development actions between and within municipal, agricultural, and energy industry users in a water-scarce region and examine how climate change stimulates further actions. We built a regional agricultural, water and electricity two-stage stochastic model that simulates optimal strategies in South Central Texas. We find that climate change significantly expands water development, causes agricultural water use reduction and reallocation to municipal interests.

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Section: Methodsmentioning

confidence: 99%

Impacts of climate change on water management

Fei

McCarl

Yang

et al. 2022

Applied Eco Perspectives Pol

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“…We highlight that when setting water prices, utilities and regulators should take account of multiple factors that modulate demand, such as temperatures and precipitation (Bell and Griffin, 2008), education, and awareness of water scarcity (Marzano et al, 2020). At least in high-income countries, there is increasing use of 'smart' meters that collect households' water use data on a minute or hourly basis, thus allowing greater flexibility and responsiveness in household water pricing (Vašak et al, 2014;Marzano et al, 2020).…”

Section: Valuation Of Water Infrastructurementioning

confidence: 99%

The Price and Value of Water: An Economic Review

Grafton¹,

Manero²,

Chu³

et al. 2023

Camb. prisms Water

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This review examines key economic concepts in relation to the price and value of water for the supply and demand of household water. It responds to a series of questions about water and how it is used. These include (1) Why water is (or is not) priced and valued (or not)?; (2) What are the key economic concepts for pricing water?; (3) How is water priced and how are water supply assets valued for full cost recovery?; (4) Who bears the costs and enjoys the benefits of water use?; and (5) When is the price of water expected to change? Examples are provided to demonstrate the universality of the economic concepts while highlighting how their application must be bespoke and account for different socio-economic contexts and bio-physical conditions where water is supplied and demanded. Impact statementWe demonstrate how key economic concepts have the potential, if effectively applied, to be transformational in relation to the who, what, where and when of how water is used globally. This opportunity arises because much of the world suffers from either too much (flooding), too little (hydrological droughts) or too dirty water that shortens and diminishes the quality of life of billions of people and degrades environments. Business as usual for water must change, given the projected increase in the world's population of about 2.5 billion over the coming decades, cascading risks from climate change with its myriad of interactions with water, rising global water use, declining aquifers in large food-producing regions, degrading riparian environment due to overextraction, and water pollution. Appropriately pricing and, separately, valuing water for economic efficiency and for more equitable and just outcomes, along with responses to longstanding water governance failures, offer potentially very large global benefits and would support the delivery of SDG 6, 'water for all'. '…(s)upplies and demands for water are not absolutely determined by natural forces and engineering requirements but rather are to be measured in terms of the economic balance of all needs and resources of the community…Where water is scarce and expensive (in terms of other resources that must be sacrificed to make more water available), it becomes justifiable to construct elaborate facilitiesto minimize intake, to recirculate quantities withdrawn, and to avoid uses that are consumptive'.

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“…As shown in Table 1, using Shin's test some papers conclude that households systematically overestimate marginal price [42,114], while others find that residential users underestimate their price because their perceptions are even lower than the average price [31,116]. Applying Shin's methodology in the field of residential water demand, Nieswiadomy and Molina [112] find customers reacting to marginal prices when blocks are increasing, and average prices when block rates are decreasing.…”

Section: Price Perception and Informationmentioning

confidence: 99%

Are Economic Tools Useful to Manage Residential Water Demand? A Review of Old Issues and Emerging Topics

García-Valiñas

Suárez-Fernández

2022

Water

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The analysis of residential water demand has long attracted attention from researchers. However, the central topics at issue have evolved considerably, transitioning from estimating price and income elasticities to using experimental techniques that assess how to motivate households towards water conservation. In this literature review, we contribute to the existing literature by giving an updated overview of the state of the art in the central topics regarding residential water demand. Moreover, we present some interesting lines of research to be explored in the future. Thus, we first review some traditional key drivers of residential water demand. Second, we discuss the role of public policies when managing residential water demand, paying special attention to pricing tools. Next, we briefly review some of the methodological issues with respect to traditional econometrics and discuss related modeling. We then discuss the role of experimental designs and nudging on residential water use. Finally, we include a summary of the main literature findings, and close the discussion introducing some emerging and promising research topics.

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An annual quasidifference approach to water price elasticity

Cited by 11 publications

References 35 publications

Impacts of climate change on water management

Impacts of climate change on water management

The Price and Value of Water: An Economic Review

Are Economic Tools Useful to Manage Residential Water Demand? A Review of Old Issues and Emerging Topics

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