October 10, 2001
Ec155A and B
This is a set of estimates of the
own-price and income elasticity of demand for water in urban Cambodia
The computer code below uses regression
analysis to estimate these lasticities, using the data that you can see in our
course ‘handouts’ file.
.
reg l_m3 l_h77 l_h179 l_h168
l_h46 dh6 dh135_1 public sub
Source | SS df MS Number of obs = 285
---------+------------------------------ F( 8, 276) = 7.62
Model |
27.0319312 8 3.3789914 Prob > F
= 0.0000
Residual
| 122.425878 276 .44357202 R-squared =
0.1809
---------+------------------------------ Adj R-squared = 0.1571
Total |
149.457809 284 .52625989 Root MSE
= .66601
------------------------------------------------------------------------------
l_m3 | Coef. Std. Err. t
P>|t| [95% Conf.
Interval]
---------+--------------------------------------------------------------------
l_h77
| -.4264823 .1351156 -3.156 0.002
-.6924703 -.1604943
l_h179 | .1841558
.0544804 3.380 0.001
.0769058 .2914058
l_h168 | .3170002
.1147267 2.763 0.006
.0911496 .5428508
l_h46 | .1259026
.0674556 1.866 0.063
-.0068903 .2586954
dh6 |
-.1440701 .1068434 -1.348
0.179 -.3544017 .0662615
dh135_1 |
.2255121 .0844093 2.672
0.008 .0593443 .3916799
public |
-.0437568 .1439393 -0.304
0.761 -.3271152 .2396016
sub |
-.0038056 .1384297 -0.027
0.978 -.2763177 .2687065
_cons |
2.305786 1.183102 1.949
0.052 -.0232647 4.634837
------------------------------------------------------------------------------
. * l_h77 is an estimate of the own-price elasticity –
At 0.42, demand is
relatively inelastic
. * l_h179 is an estimate of the income –
At 0.18, not a huge
difference between the rich and the poor
. * l_h68 is an estimate of the effect of family size –
At 0.31, larger
families need more water, but not at a one-to-one rate
What policy conclusions can you reach from
these results?