A Switching Regression Approach to Spatial Patterns in Residential Water Demand

This study explores spatial regimes variation and the impact of public sector wa ter pricing for municipality aggregate residential water demand including electricity price effe cts. I compare estimations from two cross-sections (1988.1 and 1993.1) on a French lattice samp le, and propose a parametric spatial autoregressive regime switching model where water a verage price is approximated by a linear spline based on nonparametric regressions. I f ind evidence of spatial dependence. Consumers respond to both water and electricity average p rice. Changes in electricity price induce modifications of water consumption distribut ion according to patterns of water use. Public sector pricing results in shifts of role in reg imes between periods.