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Demand-Side Technology Standards Under Inefficient Pricing Regimes

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  • Christopher Timmins

Abstract

When price-setting regulators haveobjectives other than maximizing socialsurplus, the conservation potential ofdemand-side technology standards can besignificantly diminished. This paperdemonstrates this by empirically recovering thesocially sub-optimal preferences of a group ofwater managers in a groundwater-dependentregion of California and simulating theirinefficient price response to the mandatedadoption of low-flow appliances by homeowners. The resulting reduction in the conservationpotential of these appliances is quantified,and a modest tax is shown to be a relativelycost-effective policy tool for conservation. If non-price conservation policies arepreferred according to equity criteria, thepaper suggests that, in order to preserve theirconservation potential, policy-makers should berequired to continue to set prices as if notechnology standards had been introduced. Copyright Kluwer Academic Publishers 2003

Suggested Citation

  • Christopher Timmins, 2003. "Demand-Side Technology Standards Under Inefficient Pricing Regimes," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 26(1), pages 107-124, September.
    • Handle: RePEc:kap:enreec:v:26:y:2003:i:1:p:107-124
    DOI: 10.1023/A:1025689706396
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    Citations

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    Cited by:

    1. Bauman, Allison & Goemans, Christopher & Pritchett, James & Thilmany McFadden, Dawn, 2015. "Modeling Imperfectly Competitive Water Markets in the Western U.S," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 201448, Agricultural and Applied Economics Association.
    2. Olmstead, Sheila M. & Michael Hanemann, W. & Stavins, Robert N., 2007. "Water demand under alternative price structures," Journal of Environmental Economics and Management, Elsevier, vol. 54(2), pages 181-198, September.
    3. Olmstead, Sheila M. & Stavins, Robert N., 2008. "Comparing Price and Non-price Approaches to Urban Water Conservation," RFF Working Paper Series dp-08-22, Resources for the Future.
    4. Jeffrey A. Edwards & Tara R. Wade & Mark L. Burkey & R. Gary Pumphrey, 2014. "Forecasting the Public's Acceptability of Municipal Water Regulation and Price Rationing for Communities on the Ogallala Aquifer," Journal of Economic Insight, Missouri Valley Economic Association, vol. 40(1), pages 1-30.
    5. Mansur, Erin T. & Olmstead, Sheila M., 2012. "The value of scarce water: Measuring the inefficiency of municipal regulations," Journal of Urban Economics, Elsevier, vol. 71(3), pages 332-346.
    6. Castledine, A. & Moeltner, K. & Price, M.K. & Stoddard, S., 2014. "Free to choose: Promoting conservation by relaxing outdoor watering restrictions," Journal of Economic Behavior & Organization, Elsevier, vol. 107(PA), pages 324-343.
    7. Christopher Timmins, 2002. "Measuring the Dynamic Efficiency Costs of Regulators' Preferences: Municipal Water Utilities in the Arid West," Econometrica, Econometric Society, vol. 70(2), pages 603-629, March.
    8. repec:ags:joaaec:163080 is not listed on IDEAS
    9. Sajjad Ahmad & Dinesh Prashar, 2010. "Evaluating Municipal Water Conservation Policies Using a Dynamic Simulation Model," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 24(13), pages 3371-3395, October.

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