Title

Price knowledge in household demand for utility services

Authors

Authors

D. W. Carter;J. W. Milon

Comments

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Abbreviated Journal Title

Land Econ.

Keywords

RESIDENTIAL WATER DEMAND; BLOCK RATES; BOUNDED RATIONALITY; ELECTRICITY; DEMAND; CHOICE APPROACH; INFORMATION; SELECTIVITY; MODELS; CONSERVATION; METAANALYSIS; Economics; Environmental Studies

Abstract

A household's decision to acquire price knowledge is endogenous in the demand for utility services and may affect elasticities and consumption levels. A simultaneous equation model with endogenous switching is developed to evaluate the effects of price knowledge and other sources of heterogeneity. Results indicate informed households were more responsive to average and marginal price signals. Informed households also use less water, but this is due to heterogeneity rather than price knowledge. Controlling for heterogeneity, price knowledge actually increases monthly water usage. The implications of accounting for differences in price knowledge in utility demand modeling and demand management policy are discussed.

Journal Title

Land Economics

Volume

81

Issue/Number

2

Publication Date

1-1-2005

Document Type

Article

Language

English

First Page

265

Last Page

283

WOS Identifier

WOS:000229093400008

ISSN

0023-7639

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