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Exploring customer heterogeneity with a scale‐extended latent class choice model: experimental evidence drawn from urban water users

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dc.contributor.authorCooper, B.
dc.contributor.authorBurton, M.
dc.contributor.authorCrase, L.
dc.date.issued2023
dc.description.abstractThe search for improved water pricing is central to urban water reform in many countries. Establishing efficient water prices is notoriously difficult, not least because different customers have different demands for water and yet they are presently faced with a one-size-fits-all approach to pricing and service. This is especially challenging where water availability fluctuates widely, as is the case in many parts of Australia, because the impacts of exposure to episodic periods of scarcity can differ markedly. There is now substantial interest in the notion of ‘unbundling’ the water product to provide a better fit between customers' preferences and the level of service received. Following this trend, this study provides important insights into householders' willingness to pay for a range of flexible water options using a choice experiment. The paper reports a relatively underemployed extension to the latent class modelling framework to investigate preference heterogeneity towards urban water products, including purchasing services that involve the provision of environmental and amenity outcomes. The work adds to studies that use choice data to reveal heterogeneity while improving our understanding of household customers' demands. Overall, it also brings into focus questions about the future management of water in urban contexts.
dc.identifier.citationAustralian Journal of Agricultural and Resource Economics, 2023; 67(2):176-197
dc.identifier.doi10.1111/1467-8489.12510
dc.identifier.issn1364-985X
dc.identifier.issn1467-8489
dc.identifier.urihttps://hdl.handle.net/11541.2/33609
dc.language.isoen
dc.publisherJohn Wiley & Sons
dc.rightsCopyright 2023 The Authors. The Australian Journal of Agricultural and Resource Economics published by John Wiley & Sons Australia, Ltd on behalf of Australasian Agricultural and Resource Economics Society Inc.This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited. (https://creativecommons.org/licenses/by/4.0/)
dc.source.urihttps://doi.org/10.1111/1467-8489.12510
dc.subjectchoice modelling
dc.subjectscale-extended latent class model
dc.subjecturban water
dc.subjectwater pricing
dc.subjectwater restrictions
dc.titleExploring customer heterogeneity with a scale‐extended latent class choice model: experimental evidence drawn from urban water users
dc.typeJournal article
pubs.publication-statusPublished
ror.fileinfo12269970060001831 13307946200001831 9916721794901831 - OAPV
ror.mmsid9916721794901831

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