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Estimating the Price Elasticity of Demand for Water with Quasi Experimental Methods

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  • Klaiber, H. Allen
  • Smith, V. Kerry
  • Kaminsky, Michael
  • Strong, Aaron

Abstract

There is a growing recognition in both the professional and popular literatures that water scarcity is a key policy issue that is especially important in arid, urban settings with the prospects for shortfalls in water availability due to the effects of climate change. Those evaluating these types of water problems usually conclude prices must be reformed so that incentives facing water users change to reflect this scarcity. Demand functions provide the basic economic relationships required to understand how water use will respond to such changes. This paper proposes a new method for estimating the price elasticity of demand that meets policy needs and can accommodate the presence of increasing block pricing structures.

Suggested Citation

  • Klaiber, H. Allen & Smith, V. Kerry & Kaminsky, Michael & Strong, Aaron, 2010. "Estimating the Price Elasticity of Demand for Water with Quasi Experimental Methods," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado 61039, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea10:61039
    DOI: 10.22004/ag.econ.61039
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    Cited by:

    1. Keivan Karimlou & Nemat Hassani & Abdollah Rashidi Mehrabadi & Mohammad Reza Nazari, 2019. "Calculating Price Elasticity of Water Demand Using Gene Expression Programming Based on Economic, Social and Meteorological Variables," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 33(12), pages 4171-4188, September.
    2. A. Alamanos & D. Latinopoulos & G. Papaioannou & N. Mylopoulos, 2019. "Integrated Hydro-Economic Modeling for Sustainable Water Resources Management in Data-Scarce Areas: The Case of Lake Karla Watershed in Greece," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 33(8), pages 2775-2790, June.

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