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The Demand for Water by Single‐Metered and Group‐Metered Households

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  • John Creedy
  • Justin Van De Ven
  • Kirsty E. McKenzie

Abstract

This paper examines water consumption in group‐metered households. A utility‐maximising model is developed in which the marginal price schedule is approximated by a polynomial function of water consumption. The model is modified to allow for an incentive for group‐metered households to consume more water than if they were separately metered. This occurs if households do not expect their own increase in water consumption to be matched by other households sharing the meter, so that part of the marginal cost of water is shifted to other households. Estimates using Western Australian data are, however, unable to detect any significant effect of this kind, perhaps because the price response itself is small.

Suggested Citation

  • John Creedy & Justin Van De Ven & Kirsty E. McKenzie, 1998. "The Demand for Water by Single‐Metered and Group‐Metered Households," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 31(3), pages 203-210, September.
    • Handle: RePEc:bla:ausecr:v:31:y:1998:i:3:p:203-210
    DOI: 10.1111/1467-8462.00066
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    Cited by:

    1. Ariel Casarin, 2014. "Regulated price reforms and unregulated substitutes: the case of residential piped gas in Argentina," Journal of Regulatory Economics, Springer, vol. 45(1), pages 34-56, February.
    2. Katrin Millock & Céline Nauges, 2010. "Household Adoption of Water-Efficient Equipment: The Role of Socio-Economic Factors, Environmental Attitudes and Policy," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 46(4), pages 539-565, August.
    3. Hoffmann, Mark & Worthington, Andrew & Higgs, Helen, 2006. "Urban water demand with fixed volumetric charging in a large municipality: the case of Brisbane, Australia," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 50(3), pages 1-13, September.

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