Roberto Martínez-Espiñeira

Estimation of residential water demand: a state-of-the-art review

This paper surveys the main issues in the literature on residential water demand. Several tariff types and their objectives are analyzed. Then, the main contributions to the literature on residential water demand estimation are reviewed, with particular attention to variables, specification model, data set, and the most common econometric problems. The paper concludes with comments on future trends and a summary of the contents of the study.

Residential Water Demand in the Northwest of Spain

A panel of monthly aggregate data from the Northwest of Spain is used to estimate domestic water demand functions under linear and non-linear tariffs. Price, billing, climatic, and sociodemographic variables are used as explanatory variables. The use of intraannual data constitutes a relevant contribution in the European context. Overall marginal price elasticity estimates lie between −0.12 and −0.17. Summer-only elasticities and elasticities associated with uses beyond the effectively free allowances seem significantly higher. Climatic variables significantly affect monthly use, although probably less than in other wealthier and drier areas. Domestic water use appears to be a normal good.

Estimating Water Demand under Increasing-Block Tariffs Using Aggregate Data and Proportions of Users per Block

The price specification suggested by Nordin (1976) for theanalysis of demand under block tariffs is applied to estimatewater demand functions using aggregate data from the Northwest ofSpain. The traditional way of using Nordins specification whenonly aggregate data are available (using values of marginal priceand difference faced by the average user) is compared with thetheoretically correct one. The latter uses the average marginalprice and the average difference, these averages being weighted bythe proportion of users per block. The availability of data on theproportion of users per block permits also the explicit modellingof the choice of block. The results show that, in the sampleanalyzed, the values of price elasticity under the traditionalspecification and the more innovative one are not significantlydifferent.

Multi-destination and multi-purpose trip effects in the analysis of the demand for trips to a remote recreational site.

One of the basic assumptions of the travel cost method for recreational demand analysis is that the travel cost is always incurred for a single purpose recreational trip. Several studies have skirted around the issue with simplifying assumptions and dropping observations considered as nonconventional holiday-makers or as nontraditional visitors from the sample. The effect of such simplifications on the benefit estimates remains conjectural. Given the remoteness of notable recreational parks, multi-destination or multi-purpose trips are not uncommon. This article examines the consequences of allocating travel costs to a recreational site when some trips were taken for purposes other than recreation and/or included visits to other recreational sites. Using a multi-purpose weighting approach on data from Gros Morne National Park, Canada, we conclude that a proper correction for multi-destination or multi-purpose trip is more of what is needed to avoid potential biases in the estimated effects of the price (travel-cost) variable and of the income variable in the trip generation equation.

Public Attitudes Toward Lethal Coyote Control

Predator control policies for coyotes are expensive and often controversial. A key aspect of this controversy is the public acceptability of different methods of coyote control, because some of the most controversial control methods are also the most cost-effective. This article casts further light on public preferences regarding lethal coyote control by analyzing data from Prince Edward Island, Canada. A distinction is made between the effects of sociodemographic characteristics on acceptability of control versus the acceptability of different lethal measures, based on damage caused by coyotes and rationale for control policies. The analysis confirms that lethal coyote control is more acceptable when coyotes are causing damage and that wildlife managers can minimize public opposition to control policies by carefully choosing among alternative methods of lethal control. I am grateful to Jerry Vaske and two anonymous referees for very useful comments on earlier drafts of the article. The project was funded by UCR grant No. 1308 St. Francis Xavier University.

Measuring Water Affordability: A Proposal for Urban Centres in Developed Countries

Although water, at least for basic needs, should be accessible to everyone, many families have trouble paying their water bill. Assessments of water affordability inform the design of water tariffs aimed at ensuring universal access to water. In order to carry out such assessments, managers must have instruments available that accurately reflect the state of water affordability. In this article, a critique is presented of one of the indicators traditionally used to measure water affordability and a proposal of an alternative way of measuring water affordability is put forward. The empirical analysis is applied to data from 301 communities in southern Spain.

‘Been There Done That’: Disentangling Option Value Effects from User Heterogeneity When Valuing Natural Resources with a Use Component

Endogeneity bias arises in contingent valuation studies when the error term in the willingness to pay (WTP) equation is correlated with explanatory variables because observable and unobservable characteristics of the respondents affect both their WTP and the value of those variables. We correct for the endogeneity of variables that capture previous experience with the resource valued, humpback whales, and with the geographic area of study. We consider several endogenous behavioral variables. Therefore, we apply a multivariate Probit approach to jointly model them with WTP. In this case, correcting for endogeneity increases econometric efficiency and substantially corrects the bias affecting the estimated coefficients of the experience variables, by isolating the decreasing effect on option value caused by having already experienced the resource. Stark differences are unveiled between the marginal effects on WTP of previous experience of the resource in an alternative location versus experience in the location studied, Newfoundland and Labrador (Canada).

Is the Pricing of Urban Water Services Justifiably Perceived as Unequal among Spanish Cities

Decentralized decision making and lack of regulation lead to the existence of significant differences in the price of water for residential uses among Spanish cities. Why do these differences persist? Do they have to do with cost differentials or do they result from political and business interests? Can users perceive water tariffs as fair or is there unfairness among citizens when it comes to the access to water? We find that some of the differences are due to arbitrary decisions made by policy and business decision makers, so it is recommended that a regulation be adopted that sets criteria for guidance in tariff design, especially for lower levels of consumption within which water is considered a merit good.

Adopting versus adapting: adoption of water-saving technology versus water conservation habits in Spain

Issues of water scarcity can be ameliorated through household adoption of water-saving technologies and by adaptation of consumption behaviour. In this paper the determinants of the adoption of water-efficient devices and of water-saving habits in Spain are analyzed using data from 27,000 households. This includes information on choices about self-reported conservation habits and decisions about the adoption of water-saving equipment. The findings show that educational campaigns have a strong positive effect on both decisions to undertake investments and decisions to adapt habits. These results also allow campaigns to be aimed at certain socio-economic groups identified in the econometric analysis.

Testing the Environmental Kuznets Curve Hypothesis with Bird Populations as Habitat-Specific Environmental Indicators: Evidence from Canada

The traditional environmental Kuznets curve (EKC) hypothesis postulates that environmental degradation follows an inverted U-shaped relationship with gross domestic product (GDP) per capita. We tested the EKC hypothesis with bird populations in 5 different habitats as environmental quality indicators. Because birds are considered environmental goods, for them the EKC hypothesis would instead be associated with a U-shaped relationship between bird populations and GDP per capita. In keeping with the literature, we included other variables in the analysis-namely, human population density and time index variables (the latter variable captured the impact of persistent and exogenous climate and/or policy changes on bird populations over time). Using data from 9 Canadian provinces gathered over 37 years, we used a generalized least-squares regression for each bird habitat type, which accounted for the panel structure of the data, the cross-sectional dependence across provinces in the residuals, heteroskedasticity, and fixed- or random-effect specifications of the models. We found evidence that supports the EKC hypothesis for 3 of the 5 bird population habitat types. In addition, the relationship between human population density and the different bird populations varied, which emphasizes the complex nature of the impact that human populations have on the environment. The relationship between the time-index variable and the different bird populations also varied, which indicates there are other persistent and significant influences on bird populations over time. Overall our EKC results were consistent with those found for threatened bird species, indicating that economic prosperity does indeed act to benefit some bird populations.