RT Journal Article
SR Electronic
T1 Demand Specification for Municipal Water Management: Evaluation of the Stone-Geary Form
JF Land Economics
JO Land Econ
FD University of Wisconsin Press
SP 399
OP 422
DO 10.2307/3147133
VO 77
IS 3
A1 Gaudin, Sylvestre
A1 Griffin, Ronald C.
A1 Sickles, Robin C.
YR 2001
UL http://le.uwpress.org/content/77/3/399.abstract
AB To specify demand in most water allocation problems, researchers face a tradeoff between flexibility and parsimony. Flexible forms are less constraining on elasticity estimates, but require large parameter sets that tend to cause poor out-of-sample forecasts and computational difficulties. Using a five-year panel of Texas municipalities, the parsimonious Stone-Geary form yields estimated demand functions that are comparable to flexible form results. The Stone-Geary specification also provides an estimate of the portion of water use that may not be responsive to price, and is useful in analysing price structures and designing conservation policies. (JEL Q25, C23)