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Title: Residential water demand modelling and behavioural economics
Author: Gardner, Kerry
ISNI:       0000 0004 2710 589X
Awarding Body: University of East Anglia
Current Institution: University of East Anglia
Date of Award: 2010
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Water supply-demand balances are becoming increasingly constrained around the world and in the United Kingdom. Although there has been a policy shift toward demand management policies to address this, demand modefling evidence is limited. This thesis makes qualitative, quantitative and behavioural contributions to this area. Qualitative and quantitative (meta-analytic) literature reviews are conducted. These indicate elasticity estimates are sensitive to methodological choices. Empiricafly it is identified that summer and long-run demand are more price and income responsive than their respective counterparts; lower income groups in developed countries are more price and less income responsive than higher income groups; and geographical demand differences exist. Publication bias tests reject bias, confirming that water is an economic good (price and income exert genuine effects on demand). A behavioural investigation of water consumers' price and consumption perceptions finds that systematic misperceptions of unit prices, consumption and tariff structures exist, regardless of which tariff structure operates. In contrast, bill perceptions are relatively accurate. This motivates a 'bill price' specification in addition to existing (marginal and average) price specifications. Perception inaccuracy is empiricafly tested against a simple explanatory framework of the costs and benefits of information acquisition. Price perceptions, but not consumption perceptions, broadly support this framework. Lastly, the first available price and wealth elasticity estimates for UK households are presented. These are -0.29 for price and +0.16 for wealth. These elasticities are generally smafler in magnitude than mean international price (-0.38) and income (+0.28) elasticities. Average and 'bill price' elasticities are significantly larger at around -0.S7. UK seasonal and income group differences appear to operate in the opposite direction to international trends (summer demand and lower income groups are less price responsive than their counterparts). Long-run UK demand appears more price responsive than the short-run. However, further research is required to develop consistent dynamic demand models in the presence of multiple endogenous variables.
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available