Preprint Article Version 2 NOT YET PEER-REVIEWED

Residential Demand for Water in a Nature Reserve of Mexico: Evidence of Effects of Perceived Price

  1. Centro de Investigaciones Biológicas del Noroeste, Instituto Politecnico Nacional No.195, Colonia Playa Palo de Santa Rita, C.P. 23090, La Paz, Baja California Sur, México
  2. Universidad Autónoma de Baja California Sur, Carretera al Sur Km 5.5, 23080 La Paz, Baja California Sur, México
  3. Centro de Investigaciones Biológicas del Noroeste. Instituto Politecnico Nacional No.195, Colonia Playa Palo de Santa Rita, C.P. 23090, La Paz, Baja California Sur, México
Version 1 : Received: 11 August 2016 / Approved: 11 August 2016 / Online: 11 August 2016 (10:48:10 CEST)
Version 2 : Received: 11 August 2016 / Approved: 12 August 2016 / Online: 12 August 2016 (09:29:43 CEST)

A peer-reviewed article of this Preprint also exists.

Almendarez-Hernández, M.A.; Avilés Polanco, G.; Hernández Trejo, V.; Ortega-Rubio, A.; Beltrán Morales, L.F. Residential Water Demand in a Mexican Biosphere Reserve: Evidence of the Effects of Perceived Price. Water 2016, 8, 428. Almendarez-Hernández, M.A.; Avilés Polanco, G.; Hernández Trejo, V.; Ortega-Rubio, A.; Beltrán Morales, L.F. Residential Water Demand in a Mexican Biosphere Reserve: Evidence of the Effects of Perceived Price. Water 2016, 8, 428.

Journal reference: Water 2016, 8, 428
DOI: 10.3390/w8100428

Abstract

The purpose of this paper is to provide empirical evidence to water policy-makers and the evaluation of the application of economic instruments such as price and other factors affecting demand, they contribute to improved decision-making around water management in the Biosphere Reserve El Vizcaino, Mexico. It was estimated a dynamic function with average price specification and other price perception specification. The findings show that consumers react to average price perceived and not the marginal price; long-run price elasticity is higher than short-run and both elasticities are inelastic. Elasticities inelastic with rising prices generate high incomes to improve water planning, supply quality and expand service coverage. The results suggest that the level of knowledge of users on the price is key to take into account restructuring rates in a scenario where the consumer has asymmetric information and themselves achieve goals of economic efficiency, social equity and environmental sustainability.

Subject Areas

lagged consumption; dynamic function; water management; average price; marginal price

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