IDEAS home Printed from https://ideas.repec.org/a/spr/anresc/v49y2012i3p767-788.html
   My bibliography  Save this article

Institutional, geographic, and facility factors affecting differences in prices for wastewater services

Author

Listed:
  • Suho Bae
  • Sheldon Gen
  • Seong-Gin Moon

Abstract

The provision of wastewater services is an important infrastructure service that affects social welfare. It improves the quality of community life by promoting sanitary conditions and minimizing the negative impact of wastewater on ecosystems. The price for this important public service, however, varies considerably across regions and localities. In this paper, we examine the physical factors and institutional characteristics that affect wastewater service prices across regions and localities. Our major concerns are the following: (1) institutional arrangements and characteristics of a wastewater utility, (2) government regulations, (3) supply factors and characteristics, and (4) natural environments and local characteristics. To analyze the price differences, we employ the demand and price equations for wastewater services using a simultaneous equations framework. For empirical estimation, we utilize a seemingly unrelated regression (SUR) method to account for the correlations between the residuals in the four price equations for wastewater services. Our empirical results are that the institutional arrangement of services, including monthly charges (versus bi-monthly or quarterly charges), provision of other infrastructure services in addition to wastewater services, and long-term debt, explain much of the price difference. In addition, the wastewater prices are influenced by state environmental regulations as well as supply factors, such as the number of wastewater treatment plants and infiltration and inflow into the sewer system. Interestingly, local geographic and meteorologic factors that were hypothesized to affect the selection of treatment processes were not found to be associated with price. These findings suggest ways wastewater services might be offered at lower prices for users. Copyright Springer-Verlag 2012

Suggested Citation

  • Suho Bae & Sheldon Gen & Seong-Gin Moon, 2012. "Institutional, geographic, and facility factors affecting differences in prices for wastewater services," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 49(3), pages 767-788, December.
    • Handle: RePEc:spr:anresc:v:49:y:2012:i:3:p:767-788
    DOI: 10.1007/s00168-011-0441-9
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s00168-011-0441-9
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s00168-011-0441-9?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Andrew F. Haughwout, 2001. "Infrastructure and social welfare in metropolitan America," Economic Policy Review, Federal Reserve Bank of New York, issue Dec, pages 1-16.
    2. David F. Batten & Charlie Karlsson (ed.), 1996. "Infrastructure and the Complexity of Economic Development," Advances in Spatial Science, Springer, number 978-3-642-80266-9, February.
    3. Halvorsen, Robert, 1975. "Residential Demand for Electric Energy," The Review of Economics and Statistics, MIT Press, vol. 57(1), pages 12-18, February.
    4. W. D. Shaw, 2005. "Water Resource Economics and Policy," Books, Edward Elgar Publishing, number 3495.
    5. repec:rre:publsh:v:37:y:2007:i:2:p:207-50 is not listed on IDEAS
    6. T. S. Breusch & A. R. Pagan, 1980. "The Lagrange Multiplier Test and its Applications to Model Specification in Econometrics," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 47(1), pages 239-253.
    7. Douglas Staiger & James H. Stock, 1997. "Instrumental Variables Regression with Weak Instruments," Econometrica, Econometric Society, vol. 65(3), pages 557-586, May.
    8. Cameron,A. Colin & Trivedi,Pravin K., 2005. "Microeconometrics," Cambridge Books, Cambridge University Press, number 9780521848053, September.
    9. Steve H. Hanke & Roland W. Wentworth, 1981. "On the Marginal Cost of Wastewater Services," Land Economics, University of Wisconsin Press, vol. 57(4), pages 558-567.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:rre:publsh:v:37:y:2007:i:2:p:207-50 is not listed on IDEAS
    2. Anthony Briant & Pierre-Philippe Combes & Miren Lafourcade, 2014. "Product Complexity, Quality of Institutions and the Protrade Effect of Immigrants," The World Economy, Wiley Blackwell, vol. 37(1), pages 63-85, January.
    3. Michalski, Tomasz & Ors, Evren, 2012. "(Interstate) Banking and (interstate) trade: Does real integration follow financial integration?," Journal of Financial Economics, Elsevier, vol. 104(1), pages 89-117.
    4. Oscar Jorda & Sharon Kozicki, 2007. "Estimation and Inference by the Method of Projection Minimum Distance," Working Papers 148, University of California, Davis, Department of Economics.
    5. Geweke, J. & Joel Horowitz & Pesaran, M.H., 2006. "Econometrics: A Bird’s Eye View," Cambridge Working Papers in Economics 0655, Faculty of Economics, University of Cambridge.
    6. Maurice J. G. Bun & Teresa D. Harrison, 2019. "OLS and IV estimation of regression models including endogenous interaction terms," Econometric Reviews, Taylor & Francis Journals, vol. 38(7), pages 814-827, August.
    7. Tutun Mukherjee & Som Sankar Sen, 2022. "Impact of CEO attributes on corporate reputation, financial performance, and corporate sustainable growth: evidence from India," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 8(1), pages 1-50, December.
    8. Gabriel Jiménez & Steven Ongena & José‐Luis Peydró & Jesús Saurina, 2014. "Hazardous Times for Monetary Policy: What Do Twenty‐Three Million Bank Loans Say About the Effects of Monetary Policy on Credit Risk‐Taking?," Econometrica, Econometric Society, vol. 82(2), pages 463-505, March.
    9. Hübler, Olaf, 2005. "Panel Data Econometrics: Modelling and Estimation," Hannover Economic Papers (HEP) dp-319, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    10. Christopher R. Knittel & Konstantinos Metaxoglou, 2008. "Estimation of Random Coefficient Demand Models: Challenges, Difficulties and Warnings," NBER Working Papers 14080, National Bureau of Economic Research, Inc.
    11. Canarella, Giorgio & Miller, Stephen M. & Nourayi, Mahmoud M., 2013. "Firm profitability: Mean-reverting or random-walk behavior?," Journal of Economics and Business, Elsevier, vol. 66(C), pages 76-97.
    12. Fabrício J. Missio & Frederico G. Jayme Jr. & Gustavo Britto & José Luis Oreiro, 2015. "Real Exchange Rate and Economic Growth: New Empirical Evidence," Metroeconomica, Wiley Blackwell, vol. 66(4), pages 686-714, November.
    13. Marjan Petreski, 2013. "Southeastern European Trade Analysis: A Role for Endogenous CEFTA-2006?," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 49(5), pages 26-44, September.
    14. Alberini, Anna & Filippini, Massimo, 2011. "Response of residential electricity demand to price: The effect of measurement error," Energy Economics, Elsevier, vol. 33(5), pages 889-895, September.
    15. Berit Gerritzen, 2016. "Women's Empowerment and HIV Prevention in Rural Malawi," Feminist Economics, Taylor & Francis Journals, vol. 22(3), pages 1-25, July.
    16. Omar Galárraga & David S. Salkever & Judith A. Cook & Stephen J. Gange, 2010. "An instrumental variables evaluation of the effect of antidepressant use on employment among HIV‐infected women using antiretroviral therapy in the United States: 1996–2004," Health Economics, John Wiley & Sons, Ltd., vol. 19(2), pages 173-188, February.
    17. Jan F. Kiviet & Qu Feng, 2014. "Efficiency Gains by Modifying GMM Estimation in Linear Models under Heteroskedasticity," UvA-Econometrics Working Papers 14-06, Universiteit van Amsterdam, Dept. of Econometrics.
    18. Abildtrup, Jens & Garcia, Serge & Olsen, Søren Bøye & Stenger, Anne, 2013. "Spatial preference heterogeneity in forest recreation," Ecological Economics, Elsevier, vol. 92(C), pages 67-77.
    19. Brunori, Paolo & Peragine, Vito & Serlenga, Laura, 2012. "Fairness in education: The Italian university before and after the reform," Economics of Education Review, Elsevier, vol. 31(5), pages 764-777.
    20. Massimiliano Bratti & Luca Benedictis & Gianluca Santoni, 2014. "On the pro-trade effects of immigrants," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 150(3), pages 557-594, August.
    21. Badi H. Baltagi & Chihwa Kao & Fa Wang, 2017. "Asymptotic power of the sphericity test under weak and strong factors in a fixed effects panel data model," Econometric Reviews, Taylor & Francis Journals, vol. 36(6-9), pages 853-882, October.

    More about this item

    Keywords

    Q25; Q27; Q21; C31;
    All these keywords.

    JEL classification:

    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • Q27 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Issues in International Trade
    • Q21 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Demand and Supply; Prices
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:anresc:v:49:y:2012:i:3:p:767-788. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.