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Article

Heterogeneity in Domestic Water Demand: An Application of Multilevel Analysis to the City of Valencia (Spain)

1
Department of Economic Analysis, EDEM Business School, 46024 València, Spain
2
Department of Economics, Catholic University of Valencia, 46003 València, Spain
*
Author to whom correspondence should be addressed.
Academic Editors: Ramón Barberán and Pilar Gracia-de-Rentería
Water 2021, 13(23), 3400; https://doi.org/10.3390/w13233400
Received: 20 October 2021 / Revised: 26 November 2021 / Accepted: 26 November 2021 / Published: 2 December 2021
(This article belongs to the Special Issue Urban Water Economics)
This paper deals with the question of unobservable heterogeneity and problems of scale in urban water demand. For this purpose, the determinants of domestic water consumption and the elasticities were estimated using a hierarchical model. For our empirical analysis, a household level data panel from Valencia (Spain) between 2009 and 2011 was available. Households were assigned to the city neighbourhoods to which they belong, which allowed us to incorporate the intra-urban scale into the analysis. In the estimate, the average price paid by each household in each bimonthly period was used due to the current tariff structure in Valencia. Regarding our results, there were differences in the consumption between the different neighbourhoods that were not independent of the average price paid by households. We found that 27% of the variability in consumption was explained by differences in household behaviour. In addition, an average price-elasticity in Valencia for all periods of −1.868 was obtained as well as a range of elasticities for the different neighbourhoods between (−1.53 and −1.21). From the results obtained, it is possible to extract relevant information for local water managers in order to apply economic instruments, prices and taxes to urban water demand. View Full-Text
Keywords: urban water; domestic water demand; IRT tariffs; microdata database; multilevel analysis; hierarchical analysis; mixed model urban water; domestic water demand; IRT tariffs; microdata database; multilevel analysis; hierarchical analysis; mixed model
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MDPI and ACS Style

Maldonado-Devis, M.; Almenar-Llongo, V. Heterogeneity in Domestic Water Demand: An Application of Multilevel Analysis to the City of Valencia (Spain). Water 2021, 13, 3400. https://doi.org/10.3390/w13233400

AMA Style

Maldonado-Devis M, Almenar-Llongo V. Heterogeneity in Domestic Water Demand: An Application of Multilevel Analysis to the City of Valencia (Spain). Water. 2021; 13(23):3400. https://doi.org/10.3390/w13233400

Chicago/Turabian Style

Maldonado-Devis, Mónica, and Vicent Almenar-Llongo. 2021. "Heterogeneity in Domestic Water Demand: An Application of Multilevel Analysis to the City of Valencia (Spain)" Water 13, no. 23: 3400. https://doi.org/10.3390/w13233400

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