ABSTRACT:
This paper modifies a general model of water demand to account for varying thresholds and deficits. Price elasticity of demand is also varied. Actual data on water consumption, demographics, water pricing, and weather are collected from northern New Castle County, Delaware. Under reasonable assumptions, the model predicts the effect of these variables on price. The relationships between price increase and thresholds, elasticities, and deficits are examined in detail. The results suggest that increases in price will induce meaningful levels of conservation, even in the presence of a threshold.
Footnotes
Joshua M. Duke is an assistant professor in the Food and Resource Economics Department at the University of Delaware in.Newark, Delaware and Robert Ehemann is a planner at the Department of Natural Resources and Environmental Control for the State of Delaware in Dover, Delaware.
- Copyright 2004 by the Soil and Water Conservation Society
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