A discrete/continuous choice approach to residential water demand under block rate pricing: reply.
A reply is presented to Donald M. Waldman's paper, “A Discrete/Continuous Choice Approach to Residential Water Demand under Block Rate Pricing: Comment”—published elsewhere in this issue—on Hewitt and Hanemann's approach to residential water demand under block rate pricing. Hewitt and Hanemann's a...
| Published in: | Land Economics Vol. 76; no. 2; pp. 324 - 331 |
|---|---|
| Main Author: | |
| Format: | Article |
| Published: |
University of Wisconsin Press
May 2000
|
| Subjects: | |
| Online Access: | View this record in EBSCOhost |
| Summary: | A reply is presented to Donald M. Waldman's paper, “A Discrete/Continuous Choice Approach to Residential Water Demand under Block Rate Pricing: Comment”—published elsewhere in this issue—on Hewitt and Hanemann's approach to residential water demand under block rate pricing. Hewitt and Hanemann's approach propounded a theory of utility maximization with kinked budget constraints and examined a model of discrete/continuous choice for water demand. Waldman is correct in noting that the econometric theory in Hewitt and Hanemann is largely confined to the case of precisely two blocks. Two models are estimated that assume linear demand and additive and normally distributed errors, and the application of non-negativity-corrected likelihood to situations where the marginal price of the original block is zero is discussed. |
|---|