Estimation of Residential Water Demand with Imperfect Price Perception

Binet, Marie-Estelle; Carlevaro, Fabrizio; Paul, Michel

doi:10.1007/s10640-013-9750-z

Cited by 48 publications

(48 citation statements)

References 23 publications

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“…Shin (1985) introduces a price-perception concept that identifies which of the two prices (the marginal or the average price) is better understood by consumers. Few researchers have followed in his footsteps; the recent work by (Binet et al, 2014) proposes significant modifications to the functional form of Shin's perceived price. The reference category for this group of dummy variables is the average pricing scheme.…”

Section: Variables and Estimationmentioning

confidence: 99%

Measuring the Income Elasticity of Water Demand: The Importance of Publication and Endogeneity Biases

2018

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. We present the first meta-analysis of the income elasticity of water demand that accounts for the effects of publication selection (the preferential reporting of estimates that are in-tuitive and statistically significant). Paradoxically, more affected by publication selection are the otherwise preferable estimates that control for endogeneity. Because such estimates tend to be smaller and less precise, they are often statistically insignificant, which leads to more intense specification searching and bias. Correcting simultaneously for publication and endogeneity biases, we find that the underlying elasticity is approximately 0.15 or less. The result is robust to controlling for 30 other characteristics of the estimates and using Bayesian model averaging to account for model uncertainty. The differences in the reported estimates are systematically driven by differences in the tariff structure, regional coverage, data granularity, and control for temperature in the demand equation. Terms of use: Documents in

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Section: Variables and Estimationmentioning

confidence: 99%

Measuring the Income Elasticity of Water Demand: The Importance of Publication and Endogeneity Biases

2018

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“…Schleich et al [8] found evidence that households respond psychologically to the fact that it rained rather than to the total amount of rainfall. In this sense, Binet et al [19] used the variable non-rainy days to explain the residential water demand for watering the garden. Therefore, we prefer to rely on the analysis with rainy days.…”

Section: The Effect Of the Reform On Water Consumption In The Three Hmentioning

confidence: 99%

Analysis of Water Tariff Reform on Water Consumption in Different Housing Typologies in Calvià (Mallorca)

Deyà-Tortella

García

Nilsson

et al. 2017

Water

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This study analyses water prices and residential water consumption using micro data for three different housing typologies in Calvià with contrasting household characteristics. We examine the effect of a price reform of the sanitation fee (implemented in 2013) on the average prices and their water consumption in each of the areas. Our results conclude that the aggregate water consumption decreased only during the year of the reform, but increased the following year. The increase in the amount of water consumed by the houses of higher standards of living was greater than the small decrease in water consumption by families with medium and low-medium incomes. Thus, the reform had a very modest effect as regards reducing water consumption, and many households increased their consumption despite the higher prices. From a water policy perspective, we recommend a water tariff scheme differentiated according to the housing characteristics in order to find the most effective and fairest way to save water.

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“…Most empirical studies have also found that residential demand for water is influenced by heterogeneity associated with differences in the size of the household [12]. For France and Spain, it is reported that household size affects the demand for water, in general positively (i.e., [18,21,22,24,25,27]), although a few studies have found the inverse result (i.e., [13,19,26]). Climate is one of the most studied drivers of domestic water demand.…”

Section: Residential Water Demand In France and Spain: A Brief Reviewmentioning

confidence: 99%

“…For France and Spain, it is found that water use increases with temperature (i.e., [12,17,19,22,23]) or with the number of dry days (i.e., [17]). On the contrary, water consumption decreases with rainfall levels (i.e., [18,19,24]). …”

Section: Residential Water Demand In France and Spain: A Brief Reviewmentioning

confidence: 99%

Household Water Demand in Andorra: Impact of Individual Metering and Seasonality

Reynaud

Pons

Pesado

2018

Water

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Abstract:Despite the large literature focused on residential water use, our knowledge of the impact of individual metering on household water consumption remains limited. Our work aims to fill this gap by providing the first estimate of the residential water demand function in the Principality of Andorra, where collective and individual metering coexists. Using a panel dataset covering the years 2006 to 2015, we propose estimating a domestic water demand function for the municipality of Andorra La Vella (the capital of Andorra). Our estimates reveal a price elasticity of the residential water demand equal to -0.7. Facing a price increase of 10 percent, households will react in the short run by reducing their water consumption by 7 percent. Interestingly, the price elasticity is found to be significantly different in single-family units compared to multi-family units. This may suggest a significant impact of individual metering on domestic water consumption in Andorra.

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Estimation of Residential Water Demand with Imperfect Price Perception

Cited by 48 publications

References 23 publications

Measuring the Income Elasticity of Water Demand: The Importance of Publication and Endogeneity Biases

Measuring the Income Elasticity of Water Demand: The Importance of Publication and Endogeneity Biases

Analysis of Water Tariff Reform on Water Consumption in Different Housing Typologies in Calvià (Mallorca)

Household Water Demand in Andorra: Impact of Individual Metering and Seasonality

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