IDEAS home Printed from https://ideas.repec.org/a/taf/applec/v50y2018i31p3364-3375.html
   My bibliography  Save this article

Valuing improvements in urban water security: evidence of heterogeneity derived from a latent class model for eastern Australia

Author

Listed:
  • Bethany Cooper
  • Michael Burton
  • Lin Crase

Abstract

In many Australian cities the response to drought has included the imposition of mandatory constraints over how water is used by households, often termed ‘water restrictions’. A similar rationing approach has been witnessed in California’s recent drought. The aim of water restrictions is to slow the depletion of water storage but restrictions have also been criticized for the costs they impose on specific water users. In order to gain insight into the potential magnitude of the cost of water restrictions, this study uses a choice experiment to investigate the non-market values for specific attributes associated with the outcomes of drought restrictions. This information was sought to understand the community’s willingness to pay for attributes related to the extent, frequency and duration of water restrictions. The article reports a latent class choice model for a major city in eastern Australia and investigates heterogeneity in preferences towards increasing water availability during drought. This study departs from the existing literature by conducting the choice experiment in a context where water supply is relatively abundant. This unique framing of the choice experiment allows for a useful comparison with existing studies and also raises challenges about the interpretation of the data for planning purposes.

Suggested Citation

  • Bethany Cooper & Michael Burton & Lin Crase, 2018. "Valuing improvements in urban water security: evidence of heterogeneity derived from a latent class model for eastern Australia," Applied Economics, Taylor & Francis Journals, vol. 50(31), pages 3364-3375, July.
    • Handle: RePEc:taf:applec:v:50:y:2018:i:31:p:3364-3375
    DOI: 10.1080/00036846.2017.1420896
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/00036846.2017.1420896
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/00036846.2017.1420896?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 look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Donna Brennan & Sorada Tapsuwan & Gordon Ingram, 2007. "The welfare costs of urban outdoor water restrictions," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 51(3), pages 243-261, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Saeideh Khosroshahi & Lin Crase & Bethany Cooper & Michael Burton, 2021. "Matching customers’ preferences for tariff reform with managers’ appetite for change: The case of volumetric‐only tariffs in Australia," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 65(2), pages 449-471, April.
    2. Khosroshahi, Saeideh & Crase, Lin & Cooper, Bethany & Burton, Michael, 2020. "Matching customers’ preferences for tariff reform with managers’ appetite for change: The case of volumetric-only tariffs in Australia," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 65(02), January.
    3. Bethany Cooper & Michael Burton & Lin Crase, 2023. "Exploring customer heterogeneity with a scale‐extended latent class choice model: Experimental evidence drawn from urban water users," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 67(2), pages 176-197, April.

    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. Byrnes, Joel & Crase, Lin & Dollery, Brian & Villano, Renato, 2010. "The relative economic efficiency of urban water utilities in regional New South Wales and Victoria," Resource and Energy Economics, Elsevier, vol. 32(3), pages 439-455, August.
    2. John Freebairn, 2013. "Imperfect Knowledge and Urban Water Decisions," Economic Papers, The Economic Society of Australia, vol. 32(1), pages 32-40, March.
    3. repec:bla:ausecr:v:41:y:2008:i:4:p:401-412 is not listed on IDEAS
    4. Bethany Cooper & Michael Burton & Lin Crase, 2019. "Willingness to Pay to Avoid Water Restrictions in Australia Under a Changing Climate," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 72(3), pages 823-847, March.
    5. Olmstead, Sheila & Stavins, Robert, 2008. "Comparing Price and Non-Price Approaches to Urban Water Conservation," Working Paper Series rwp08-034, Harvard University, John F. Kennedy School of Government.
    6. Amit K. Bhandari & Almas Heshmati, 2009. "Willingness to Pay for Biodiversity Conservation," TEMEP Discussion Papers 200938, Seoul National University; Technology Management, Economics, and Policy Program (TEMEP), revised Dec 2009.
    7. Lin Crase & Suzanne O’Keefe & Brian Dollery, 2008. "Can Urban Water Markets Work? Some Concerns," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 15(3), pages 73-82.
    8. 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.
    9. Hughes, Neal & Hafi, Ahmed & Goesch, Tim & Brownlowe, Nathan, 2008. "Urban water management: optimal price and investment policy under uncertainty," 2008 Conference (52nd), February 5-8, 2008, Canberra, Australia 6005, Australian Agricultural and Resource Economics Society.
    10. Janine Stone & Christopher Goemans & Marco Costanigro, 2019. "Variation in Water Demand Responsiveness to Utility Policies and Weather: A Latent-Class Model," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 6(01), pages 1-33, September.
    11. David A. Fleming‐Muñoz & Stuart Whitten & Graham D. Bonnett, 2023. "The economics of drought: A review of impacts and costs," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 67(4), pages 501-523, October.
    12. Sheila M. Olmstead, 2010. "The Economics of Managing Scarce Water Resources," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 4(2), pages 179-198, Summer.
    13. Halkos, George & Matsiori, Steriani & Dritsas, Sophoclis, 2017. "Exploring social values for marine protected areas: The case of Mediterranean monk seal," MPRA Paper 82490, University Library of Munich, Germany.
    14. Pagan, Phil & Crase, Lin, 2008. "Institutional Constraints and Inter-jurisdictional Water Trade: The Case of the Australian Capital Territory and New South Wales," 2008 Conference (52nd), February 5-8, 2008, Canberra, Australia 6035, Australian Agricultural and Resource Economics Society.
    15. Steven Buck & Maximilian Auffhammer & Stephen Hamilton & David Sunding, 2016. "Measuring Welfare Losses from Urban Water Supply Disruptions," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 3(3), pages 743-778.
    16. Lal, Pankaj & Wolde, Bernabas & Masozera, Michel & Burli, Pralhad & Alavalapati, Janaki & Ranjan, Aditi & Montambault, Jensen & Banerjee, Onil & Ochuodho, Thomas & Mugabo, Rodrigue, 2017. "Valuing visitor services and access to protected areas: The case of Nyungwe National Park in Rwanda," Tourism Management, Elsevier, vol. 61(C), pages 141-151.
    17. 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.
    18. Neal Hughes & Ahmed Hafi & Tim Goesch, 2009. "Urban water management: optimal price and investment policy under climate variability ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 53(2), pages 175-192, April.
    19. Productivity Commission, 2008. "Towards Urban Water Reform: A Discussion Paper," Research Papers 0801, Productivity Commission, Government of Australia.
    20. R. Quentin Grafton & Michael B. Ward, 2008. "Prices versus Rationing: Marshallian Surplus and Mandatory Water Restrictions," The Economic Record, The Economic Society of Australia, vol. 84(s1), pages 57-65, September.
    21. Asci, Serhat & Borisova, Tatiana, 2014. "The Effect of Price and Non-Price Conservation Programs on Residential Water Demand," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170687, Agricultural and Applied Economics Association.

    More about this item

    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:taf:applec:v:50:y:2018:i:31:p:3364-3375. 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: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RAEC20 .

    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.