You are not currently logged in.
Access JSTOR through your library or other institution:
If You Use a Screen ReaderThis content is available through Read Online (Free) program, which relies on page scans. Since scans are not currently available to screen readers, please contact JSTOR User Support for access. We'll provide a PDF copy for your screen reader.
Alternate Price Specifications for Estimating Residential Water Demand with Fixed Fees
R. G. Taylor, John R. McKean and Robert A. Young
Vol. 80, No. 3 (Aug., 2004), pp. 463-475
Published by: University of Wisconsin Press
Stable URL: http://www.jstor.org/stable/3654732
Page Count: 13
You can always find the topics here!Topics: Prices, Average revenue, Average prices, Marginal pricing, Market prices, Fees, Price elasticity, Water demand, Consumer prices, Demand
Were these topics helpful?See something inaccurate? Let us know!
Select the topics that are inaccurate.
Since scans are not currently available to screen readers, please contact JSTOR User Support for access. We'll provide a PDF copy for your screen reader.
Preview not available
Using a new model formulation and data from a sample of Colorado utilities, we investigated the price specification controversy (marginal price versus average revenue) when estimating residential water demand. The improved statistical fit using average revenue as the price variable was shown to be an artifact of the unitary elastic identity created when monthly rate schedules contain a fixed fee. When the fixed fee was purged from the data, average price was not significant, but marginal price remained significant. In the preferred double-log marginal price model, estimated price elasticity was -0.3, and conservation programs had no significant effect on water use.
Land Economics © 2004 Board of Regents of the University of Wisconsin System