national multiple family submetering and allocation billing program ...

esults from this analysis point to a likely range of elasticity values from -0.07 to -0.16 for
submetered properties.
90
80
2002 water use (kgal/unit/year)
70
60
50
40
30
20
y = -0.8714x + 51.509
R 2 = 0.0368
y = 56.444x -0.1623
R 2 = 0.1199
10
0
$0 $2 $4 $6 $8 $10 $12 $14 $16 $18
Submetered combined water and sewer rates ($/kgal)
Figure 6.2 Demand curve and equations, elasticity analysis #2 (submetering rates)
These elasticity analyses are a straightforward and simple evaluation of elasticity. It
should be noted that the elasticity analysis was considered important, but not a core component
of this study, and hence less effort was dedicated to this component than would be in a study
more strictly focused on elasticity. Typically a number of other factors are included in elasticity
analysis including weather patterns and demographics. Of primary concern to the researchers
was the potential influence of weather on price elasticity. The weather variable is essentially
removed because this analysis only considers indoor water use. Even without the inclusion of
other independent variables, the elasticity values calculated in this study are remarkably similar
to those found in other studies that were particularly focused on this exact question.
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