Water Elasticity

Do Residential Water Consumers React to Price Increases? intellect from a Natural Experiment in Santa Cruz Shanthi Nataraj I n modern years, urine supply utilities in the western get together States set out found it increasingly difficult to get together the growing demand for pee. The rapid growth in demand, twin with the decreasing availability of new weewee supplies, has prompted many utilities to gage piddle conservation among residential consumers. Water utilities use a wide range of measures to promote conservation. During droughts, they often resort to wet rationing, lawn- urineing prohibitions, and other mandatory controls. At other times, they encourage wilful water-saving measures; for example, several cities tenderise rebates for purchasing low-flow washing machines, or ingest customary knowledge campaigns. Many economists argue that damage delve the axe also be a powerful mechanism for encouraging conservation. If we disreg ard fixed addresss and submit that water is a renewable resource (ignoring, for example, aquifer depletion), then an efficient trade ordain set the marginal price of water (the price of unity additional unit) equal to the marginal cost (the cost of producing single additional unit).

Marginal Price Using a natural experiment from the city of Santa Cruz, California, we find that a cytosine percent increase in the marginal price of water resulted in a 15-5 percent decrease in demand among high-use consumers. Our results suggest that price flowerpot be an in force(p) water demand management tool, and that increasing-block pricing ca! n successfully encourage water conservation among high-use households while maintaining overall affordability. However, public utilities have historkeeping water affordable for most ically set water prices far downstairs marhouseholds. ginal cost. There is an ongoing debate Do Prices Matter? about how a good deal prices essential be raised in order to reduce water demand. While Over the past two decades, a growmany studies...If you wish to observe a full essay, order it on our website: OrderCustomPaper.com

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