Nondiscretionary residential water use : the impact of habits and water-efficient technologies

Garcia-Valiñas, Maria A., Athukorala, Wasantha, Wilson, Clevo, Torgler, Benno, & Gifford, Robert (2014) Nondiscretionary residential water use : the impact of habits and water-efficient technologies. The Australian Journal of Agricultural and Resource Economics, 58(2), pp. 185-204.

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Several studies published in the last few decades have demonstrated a low price-elasticity for residential water use. In particular, it has been shown that there is a quantity of water demanded that remains constant regardless of prices and other economic factors. In this research, we characterise residential water demand based on a Stone-Geary utility function. This specification is not only theory-compatible but can also explicitly model a minimum level of consumption not dependent on prices or income. This is described as minimum threshold or nondiscretionary water use. Additionally, the Stone-Geary framework is used to model the subsistence level of water consumption that is dependent on the temporal evolution of consumer habits and stock of physical capital. The main aim of this study is to analyse the impact of water-saving habits and water-efficient technologies on residential water demand, while additionally focusing attention on nondiscretionary uses. This is informed by an empirical application using data from a survey conducted among residents of Brisbane City Council, Australia. The results will be especially useful in the design of water tariffs and other water-saving policies.

Impact and interest:

2 citations in Scopus
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ID Code: 65462
Item Type: Journal Article
Refereed: Yes
Keywords: conservation economics, demand analysis, water management and policy
DOI: 10.1111/1467-8489.12030
ISSN: 1364-985X
Divisions: Current > QUT Faculties and Divisions > QUT Business School
Current > Schools > School of Economics & Finance
Copyright Owner: Copyright 2013 Australian Agricultural and Resource Economics Society Inc. and Wiley Publishing Asia Pty Ltd
Copyright Statement: The definitive version is available at
Deposited On: 19 Dec 2013 02:17
Last Modified: 07 May 2015 17:00

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