Current Issues in the Economics of Water Resource Management: Theory, Applications and Policies: 23 (Economy & Environment, 23) - Hardcover

Hardcover

ISBN 10: 1402005423 ISBN 13: 9781402005428

Publisher: Springer, 2002

Synopsis

The marginal price elasticities estimated by Martinez-Espineira conforms to expectation. The price specification that accounts for the changing proportion of water users in each block yields a higher elasticity (-0. 47) compared to the spec­ ification ignoring this feature of the data. However, this difference is not found to be statistically significant, a result attributed to the low power of the test (small sample size limiting the accuracy of estimates). In conclusion, the paper provides a theoretically correct price specification for demand functions under block pricing and aggregate data. The empirical findings in the paper, however, are not conclusive and further empirical work using more data and alternative (nonlinear) demand functions, is needed to show the practical implications of the arguments put forward by the Martinez-Espineira's paper. Static empirical consumer demand functions estimated with aggregate data are well known to suffer form serial correlation and other statistical problems asso­ ciated with misspecified dynamics. These dynamics arise because consumers do not react immediately to a change in prices due to their largely predetermined lifestyle. In the case of demand for water, for example, current purchases can be largely predetermined due to commitments arising from past purchases such as swimming pools, bathtubs, dishwashing machines, etc. Muellbauer and Pashardes (1992) show that the autoregressive nature of consumer demand data can be cap­ tured in a theoretically consistent manner by incorporating intertemporal aspects of consumer behaviour in the model through habit formation and durability.

About this title

Synopsis

Water resource management is complicated in practice on account of the diverse nature of the resource and its many uses. This volume reports recent economic research on the theory, practice, and policy of water management. It is distinguished by the number and the range of the applications it considers. Chapters consider problems in the estimation of water demand in residential and agricultural contexts. Efficiency and externality considerations are considered in chapters concerning common aquifers as well as domestic conservation. Management policies are discussed in regard to chemical contamination, reservoir construction, and industrial regulation. The volume is intended for resource economists, especially those concerned with the management of water resources. It provides insights into the latest research on the economic issues concerning this important resource.

Edition details

• Publisher: Springer
• Publication date: 2002
• Language: English
• ISBN 10: 1402005423
• ISBN 13: 9781402005428
• Binding: Hardcover
• Number of pages: 244
• Editor: Pashardes P., Swanson T.M., Xepapadeas A.