Household water demand seasonal elasticities: A Stone-Geary model under an increasing block rate structure

Andrew J. Clarke, Bonnie G Colby, Gary D Thompson

Research output: Contribution to journalArticlepeer-review

5 Scopus citations

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 languageEnglish (US)
Pages (from-to)608-630
Number of pages23
JournalLand Economics
Volume93
Issue number4
DOIs
StatePublished - Nov 1 2017

ASJC Scopus subject areas

  • Environmental Science (miscellaneous)
  • Economics and Econometrics

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