Estimates reported in this paper are based on bimonthly meter readings for 599 single-family households over the period 1982-1992 from the Alameda County Water District, which used a steeply increasing block rate structure as a drought management policy from July 1991 to the end of the data collection period in July 1992.
Based on estimates using the Alameda County Water District data on household water use, it appears that the lack of variation in prices in some of the data sets used in the literature has masked more fundamental problems with the econometric techniques being used.
This paper generalizes their models to the four-block rate structure used by Alameda County Water District, and also explores the use of fixed effects models as an alternative means of modeling household water demand.(8)
The data on water use come from Alameda County Water District (ACWD), which covers Fremont, Newark, and Union City, California, in the Southeast San Francisco Bay area, south of Oakland.
These predictions can be compared with aggregate data collected from Alameda County Water District as part of the water agency survey reported in Dixon, Moore, and Pint (1996).
The example of Alameda County Water District illustrates that an increasing block rate structure can be an effective part of a drought management strategy.