PT  - JOURNAL ARTICLE
AU  - Baerenklau, Kenneth A.
AU  - Schwabe, Kurt A.
AU  - Dinar, Ariel
TI  - The Residential Water Demand Effect of Increasing Block Rate Water Budgets
AID  - 10.3368/le.90.4.683
DP  - 2014 Nov 01
TA  - Land Economics
PG  - 683--699
VI  - 90
IP  - 4
4099  - http://le.uwpress.org/content/90/4/683.short
4100  - http://le.uwpress.org/content/90/4/683.full
SO  - Land Econ2014 Nov 01; 90
AB  - We investigate the effect of introducing a fiscally neutral increasing block rate water budget price structure on residential water demand. We estimate that demand was reduced by around 17%, although the reduction was achieved gradually over more than three years. As intermediate steps we derive estimates of price and income elasticities that rely only on longitudinal variability. We investigate how different subpopulations responded to the pricing change and find evidence that marginal, rather than average, prices may be driving consumption. We also derive alternative rate structures that might have been implemented, and assess their estimated demand effects. (JEL Q25)