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Abstract

Limited dependent variable techniques are used to model the decision-making process in a dual-pricing household water system as employed in Brisbane, Australia. In this system, households could initially choose to remain on a standard ratable value principle of payment for water or to move to a volumetric, user-pays system. Because of uncertainty associated with future household water demand, the option to remain on the existing system has value and is thereby incorporated into the appropriate decision-making model. A number of property and household characteristics are found to influence the choice of water charging system along with the value of the option. These include property size and ratable value, the number of household members, the type of garden vegetation, and the presence of various household appliances.

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Consumer Preferences and Water Charging Options in a Large Urban Municipality

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