Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/194564
Authors: 
Schleich, Joachim
Hillenbrand, Thomas
Year of Publication: 
2019
Series/Report no.: 
Working Paper Sustainability and Innovation S03/2019
Abstract: 
This paper econometrically estimates residential water consumption in Germany between 2007 and 2013 based on a panel of almost 3000 supply areas. In particular, the analysis distinguishes periods of rising and falling water and sewage water prices. The short-run (long-run) price elasticity is estimated at around 4.2% (13%), but water demand appears to respond asymmetrically to rising and falling prices. When prices are rising, the short-run (long-run) price elasticity is around 6.5% (18%). When prices are falling, the short-run price elasticity is not statistically different from zero, and the long-run price elasticity is estimated at around 12%. Additional results illustrate that employing average prices instead of marginal prices results in substantially overestimating the price elasticity. These findings are particularly relevant for utilities and regulators planning to alter the tariff structure towards a higher fixed fee and a lower volumetric fee.
Subjects: 
water consumption
econometrics
rebound
tariff
price elasticity
panel data
Persistent Identifier of the first edition: 
Document Type: 
Working Paper
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