C. Nauges et A. Thomas, Privately operated water utilities, municipal price negotiation, and estimation of residential water demand: The case of France, LAND ECON, 76(1), 2000, pp. 68-85
This paper addresses the issue of price negotiation between a municipality
and a private water utility operator, and its implications for residential
water demand estimation. We rise appropriate econometric procedures to esti
mate a water demand equation on a panel of French municipalities. We find e
vidence that negotiated water price depends on municipality's characteristi
cs, causing endogeneity of price in the demand equation. The impact of aver
age household income,, housing, and system features such as metering is inv
estigated both on municipal consumption and price. Estimated price and inco
me elasticities are significant and close to previous household level studi
es. (JEL Q25).