A platform for research: civil engineering, architecture and urbanism
A platform for research: civil engineering, architecture and urbanism
Understanding the Residential Water Demand Response to Price Changes: Measuring Price Elasticity with Social Simulations
Water pricing is an economic instrument traditionally used to reduce water demand. However, its effective implementation requires knowledge of the extent to which users reduce water consumption with increasing water prices. The price elasticity of water demand has been estimated using econometric regression, which relies on cross-sectional and time-series water data. As an alternative, we propose the use of agent-based modelling, which does not require reliable historical data on water prices and consumption and enables the simulation of multiple scenarios with different consumer profiles, behaviour profiles and water price changes, thereby allowing comprehensive understanding of price elasticity estimates. To illustrate the potential use of agent-based modelling for the estimation of water demand price elasticity, we performed an empirical application to a residential area in Chile. Price elasticity estimates ranged from −0.0159 to −0.1036 (mean −0.0250), indicating that residential water consumption is inelastic to price changes. This result is consistent with previous findings. Agent-based modelling is an alternative for the ex-ante assessment of the potential effectiveness of water pricing policies intended to reduce residential water demand.
Understanding the Residential Water Demand Response to Price Changes: Measuring Price Elasticity with Social Simulations
Water pricing is an economic instrument traditionally used to reduce water demand. However, its effective implementation requires knowledge of the extent to which users reduce water consumption with increasing water prices. The price elasticity of water demand has been estimated using econometric regression, which relies on cross-sectional and time-series water data. As an alternative, we propose the use of agent-based modelling, which does not require reliable historical data on water prices and consumption and enables the simulation of multiple scenarios with different consumer profiles, behaviour profiles and water price changes, thereby allowing comprehensive understanding of price elasticity estimates. To illustrate the potential use of agent-based modelling for the estimation of water demand price elasticity, we performed an empirical application to a residential area in Chile. Price elasticity estimates ranged from −0.0159 to −0.1036 (mean −0.0250), indicating that residential water consumption is inelastic to price changes. This result is consistent with previous findings. Agent-based modelling is an alternative for the ex-ante assessment of the potential effectiveness of water pricing policies intended to reduce residential water demand.
Understanding the Residential Water Demand Response to Price Changes: Measuring Price Elasticity with Social Simulations
Pol Vidal-Lamolla (author) / María Molinos-Senante (author) / Manel Poch (author)
2024
Article (Journal)
Electronic Resource
Unknown
Metadata by DOAJ is licensed under CC BY-SA 1.0
Residential price elasticity of demand for water
| British Library Conference Proceedings | 2005
Forecasting Demand and Measuring Price Elasticity
| Wiley | 1989
Water price, price elasticity and the demand for drinking water
| Online Contents | 1998
Financing and charging for water and sanitation - Residential price elasticity of demand for water
| Online Contents | 2005
Price elasticity of the demand for water in Southern California
| Online Contents | 1967