Premium
A panel data analysis of commercial customers' water price responsiveness under block rates
Author(s) -
Moeltner Klaus,
Stoddard Shawn
Publication year - 2004
Publication title -
water resources research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.863
H-Index - 217
eISSN - 1944-7973
pISSN - 0043-1397
DOI - 10.1029/2003wr002192
Subject(s) - simultaneity , econometrics , panel data , block (permutation group theory) , consumption (sociology) , water consumption , demand management , economics , environmental science , computer science , water resource management , mathematics , social science , physics , geometry , macroeconomics , classical mechanics , sociology
The existing literature on nonresidential water demand has primarily employed cross‐sectional models based on time‐aggregated data. In this study, we analyze panel data models of commercial water demand that build on monthly observations of water use and marginal prices for individual customers. This allows for a closer investigation of the temporal aspects of commercial water demand. We show that commercial water demand can exhibit strong seasonal patterns. These temporal consumption patterns aggravate simultaneity problems associated with block pricing if they are not explicitly accounted for in demand specifications.