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René Cabral, Luciano Ayala and Victor Hugo Delgado
''Residential Water Demand and Price Perception under Increasing Block Rates''
( 2017, Vol. 37 No.1 )
We estimate residential water demand for Mexico´s Northern Border state of Nuevo León using data from the National Household Survey. Employing Shin's (1985) price perception model and instrumental variables (IV) techniques to deal with simultaneity problems, our findings indicate that households in the region respond to a ‘perceived' price which is considerably lower than actual water prices. Elasticity estimates for price and income are consistent with theory and previous findings in the literature.
Keywords: Water demand, price perception, Mexico, instrumenal variables
JEL: H4 - Publicly Provided Goods: General
C5 - Econometric Modeling: General
Manuscript Received : Sep 09 2016 Manuscript Accepted : Mar 20 2017

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