Open AccessPANEL DATA ANALYSIS OF JAPANESE RESIDENTIAL WATER DEMAND USING A DISCRETE/CONTINUOUS CHOICE APPROACH *
Author(s) -
MIYAWAKI KOJI,
OMORI YASUHIRO,
HIBIKI AKIRA
Publication year - 2011
Publication title -
the japanese economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.205
H-Index - 28
eISSN - 1468-5876
pISSN - 1352-4739
DOI - 10.1111/j.1468-5876.2010.00532.x
Subject(s) - endogeneity , economics , markov chain monte carlo , econometrics , bayesian probability , piecewise , panel data , budget constraint , markov chain , monte carlo method , computer science , discrete choice , estimator , mathematical optimization , microeconomics , mathematics , statistics , mathematical analysis , artificial intelligence , machine learning
Block rate pricing is often applied to income taxation, telecommunication services, and brand marketing, in addition to its best‐known application in public utility services. Under block rate pricing, consumers face piecewise‐linear budget constraints. A discrete/continuous choice approach is usually used to account for piecewise‐linear budget constraints in demand and price endogeneity. A recent study proposed a method to incorporate a separability condition ignored by previous studies, by implementing a Markov chain Monte Carlo simulation based on a hierarchical Bayesian approach. To extend this approach to panel data, our study proposes Bayesian hierarchical models incorporating random and fixed individual effects.