A Discrete/Continuous Choice Approach to Residential Water Demand under Block Rate Pricing: Reply

摘要: Waldman is quite correct in noting that the microeconomic theory of block rate pricing Hewitt and Hanemann (HH 1995) given for general case a K-block structure, whereas econometric largely confined to exactly two blocks. The extension more K blocks correct, although itself could be even general, if it addressed nonnegativity demand, as demonstrated below. That no apparent attention was paid demand HH may attributed fact need do so negated by fortuitous assumption earlier work. Although assumption-that errors are multiplicative lognormally distributed-was only maintained not tested HH, I now estimate models with common assumptions linear additive normally distributed errors, both without modification