Ramón Barberán

Household Size and Residential Water Demand: An Empirical Approach

The effectiveness of pricing policies depends on the price elasticity of consumption. It is well documented that residential demand for water is influenced by heterogeneity associated with differences in the size of the household and socioeconomic characteristics. In this paper, we focus on household size. Our initial hypothesis is that users’ sensitivity to changes in price is different depending on the number of household members. To this end, we carry out an empirical estimation of urban water demand in Zaragoza (Spain) distinguishing between households with different sizes using data at the individual level. As far as we are aware, this approach to urban residential water demand is new in the literature. The analysis suggests that all households are sensitive to prices regardless of size. A more relevant finding is that small households are more sensitive to price changes.

The Value of Leisure Time: A Contingent Rating Approach

In this paper, we apply the contingent rating method to the problem of estimating a value for leisure time. This is an important component of recreation demand models. A tradition in this literature has been to use some fixed percentage of the wage rate as the value of time. However, time values are likely to vary across individuals to a greater extent than this suggests, whilst for a given individual time is differently valued according to how it is spent. Empirical results show that there is indeed a wide variation in leisure time values.

The economic evaluation of health programmes: why discount health consequences more than monetary consequences?

There is currently general agreement amongst economists that the discount rate to compute the present value of benefits and costs in the economic evaluation of public policies is defined according to the social time preference approach. However, whether this rate has to be used for the discount of non-monetary health consequences is a question for which there is no satisfactory reply. In this paper, it is argued that such a reply rests on the estimation of the relationship between the individual time preference for health and money in the contexts of private and social choice. In support of this argument an empirical analysis has been carried out in which the individuals making-up a representative sample of the population of Zaragoza (Spain) have been faced with a series of hypothetical inter-temporal choices. Their replies have implicitly revealed their temporal preference rates and have led to the conclusion that health consequences are discounted at a higher rate than monetary consequences. This would appear to be contrary to the standard practice applied in the economic valuation of health programmes.

Tariffs for Urban Water Services in Spain: Household Size and Equity

The purpose of this work is to evaluate the consequences of tariffs that use sliding-scale prices to assess the aggregated consumption of households in terms of equity. Particular attention is paid to special tariffs for larger households. The study analyzes the tariffs that were in effect in Spanish provincial capitals in 2008. The results confirm that there are equity problems associated with the size of the household, particularly regarding large households. Furthermore, the results show that a large part of the special tariffs that have been adopted do not solve that equity problem.

The discounted utility model and social preferences:: Some alternative formulations to conventional discounting

This paper considers four patterns of intertemporal choice. First, the time effect, an inverse relation between time preference (TP) and the time implied in the choice. Secondly, the magnitude effect, an inverse relation between TP and the amount implied in the choice. Thirdly, delay/speed-up asymmetry, that is to say, a change in the preferences in function of the framing of the choices. Fourthly, the domain effect, where TPs differ as between health and money. The novel aspect of the paper is the finding that such patterns are present when individuals face intertemporal social choices with respect to money and health which, therefore, could be interpreted as fundamental properties of intertemporal choice. Furthermore, given the time effect, consideration is given to the quantitative form of the discount function. It is found that hyperbolic discounting models provide a better description of the stated preferences than the conventional discounted utility model or the quasi-hyperbolic discounting model. The results provide evidence in support of the hyperbolic social discounting models.

Economic analysis of the water demand in the hotels and restaurants sector: Shadow prices and elasticities

Despite the growing economic importance of tourism, and its impact on relative water shortage, little is known about the role that water plays in the productive process of hotels and restaurants and, therefore, the possible implications of water demand management policy for this sector. This study aims to fill this gap. It is based on the microdata of 676 firms in the sector, operating in the city of Zaragoza (Spain) for a 12 year period. Based on the Translog cost function, we estimate the shadow price of water in the short run and, from a long-run perspective, its direct price elasticity, its cross elasticities relative to labor, capital, and supplies, and its elasticity with respect to the level of output. The results obtained show that water provides sector firms returns that are on average higher than its price, although in the case of hotels the margin is really narrow. This situation provides policy makers with a margin for applying price increases without affecting the sectors viability, with some caution in the case of hotels. Water demand elasticity equals −0.38 in the case of hotels, but it is not significant in the case of restaurants and bar-cafes; hence, only in hotels is there potential for influencing water use patterns, encouraging the resources conservation through pricing policy. Moreover, capital is a substitutive factor of water, and the elasticity of water with respect to output is 0.40, all of which should also be considered by policy makers in water resource management.