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,Olmstead is an Assistant Professor of Environmental Economics at the Yale School of Forestry and Environmental Studies. Hanemann is the Chancellor's Professor in the Department of Agricultural and Resource Economics and in the Goldman School of Public Policy, University of California, Berkeley. Stavins is the Albert Pratt Professor of Business and Government and Director of the Environmental Economics Program, John F. Kennedy School of Government, Harvard University, and a University Fellow of Resources for the Future. This work was supported in part by a grant from the National Science Foundation, Economics Program. For comments and guidance, we are grateful to Li Gan, Tony G贸mez-Ib谩?ez, Julie Hewitt, Jeffrey Liebman, Erin Mansur, Todd Olmstead, Ellen Pint, Bob Triest, Frank Wolak, Richard Zeckhauser, and seminar participants at Yale, Harvard, the University of California, Santa Barbara, and the National Bureau of Economic Research. Graeme Auld provided excellent research assistance. The authors, alone, are responsible for any remaining errors.

Do Consumers React to the Shape of Supply? Water Demand Under Heterogeneous Price Structures