Abstract
Using household-level panel data from Tucson, Arizona, and a unique set of highly disaggregated control variables, we estimate residential demand for water via a Stone-Geary specification. The Stone-Geary functional form allows price elasticity of demand to vary with quantity consumed, price, and income and enables estimation of a threshold level of consumption below which demand is considered perfectly price inelastic. An encompassing test of consumer price response reveals evidence favoring a lagged average price specification rather than one using lagged marginal price. The estimated model also finds substantial seasonal variation in price elasticity and declining consumer price responsiveness.
Original language | English (US) |
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Pages (from-to) | 608-630 |
Number of pages | 23 |
Journal | Land Economics |
Volume | 93 |
Issue number | 4 |
DOIs | |
State | Published - Nov 1 2017 |
ASJC Scopus subject areas
- Environmental Science (miscellaneous)
- Economics and Econometrics