Measuring the dynamic efficiency costs of regulators' preferences: Municipal water utilities in the Arid West

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2002-04-13

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Evidence suggests that municipal water utility administrators in the western US price water significantly below its marginal cost and, in so doing, inefficiently exploit aquifer stocks and induce social surplus losses. This paper empirically identifies the objective function of those managers, measures the deadweight losses resulting from their price-discounting decisions, and recovers the efficient water pricing policy function from counterfactual experiments. In doing so, the estimation uses a "continuous-but-constrained-control" version of a nested fixed-point algorithm in order to measure the important intertemporal consequences of groundwater pricing decisions.

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Scholars@Duke

Timmins

Christopher D. Timmins

Professor of Economics

Christopher D. Timmins is a Professor in the Department of Economics at Duke University, with a secondary appointment in Duke’s Nicholas School of the Environment. He holds a BSFS degree from Georgetown University and a PhD in Economics from Stanford University. Professor Timmins was an Assistant Professor in the Yale Department of Economics before joining the faculty at Duke in 2004. His professional activities include teaching, research, and editorial responsibilities. Professor Timmins specializes in natural resource and environmental economics, but he also has interests in industrial organization, development, public and regional economics. He works on developing new methods for non-market valuation of local public goods and amenities, with a particular focus on hedonic techniques and models of residential sorting. His recent research has focused on measuring the costs associated with exposure to poor air quality, the benefits associated with remediating brownfields and toxic waste under the Superfund program, the valuation of non-marginal changes in disamenities, and the causes and consequences of "environmental injustice".

Professor Timmins is a research associate in the Environmental and Energy Economics group at the National Bureau of Economic Research, and has served as a reviewer for numerous environmental, urban, and applied microeconomics journals as well as governments agencies and foundations. He has served as a co-editor of the Journal of Environmental Economics and Management and as an editor of the Journal of the Association of Environmental and Resource Economists.


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