Pashardes, Panos and Koundouri, Phoebe and Hajispyrou, Soteroula (2002): Household Demand and Welfare Implications of Water Pricing in Cyprus. Published in: Environment and Development Economics , Vol. 7, No. 4 (2002): pp. 659-685.
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This paper considers a model of household demand for water in a theoretical framework consistent with funtamendal principles of comsumer behaviour. It applies this model to individual household data to estimate the price and income elasticities of residential demand for water in Cyprus and evaluate the welfare effects associated with changes in the water pricing system. We &nd that the current regionally heterogeneous increasing block pricing system in the island introduces gross price distortions that are not justi&ed either on efficiency or equity grounds. A shift towards uniform marginal cost pricing will eliminate the deadweight loss of the current system. However, its bene&ts will be distributed in favour of the better off households. Overall, price can be an effective tool for residential water demand management, however, it may also lead to socially undesirable distributional effects on households.
|Item Type:||MPRA Paper|
|Original Title:||Household Demand and Welfare Implications of Water Pricing in Cyprus|
|English Title:||Household Demand and Welfare Implications of Water Pricing in Cyprus|
|Keywords:||Residential water demand, increasing block pricing, consumer welfare, water management|
|Subjects:||D - Microeconomics > D6 - Welfare Economics
Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q2 - Renewable Resources and Conservation > Q25 - Water
Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q2 - Renewable Resources and Conservation
|Depositing User:||Phoebe Koundouri|
|Date Deposited:||01. Oct 2012 13:42|
|Last Modified:||14. Feb 2013 17:33|
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