ESTIMAÇÃO DE FUNÇÕES DE DEMANDA RESIDENCIAL DE ÁGUA EM CONTEXTOS DE PREÇOS NÃO LINEARES

This paper estimates residential water demand functions taking into account the block rate pricing schedule usually set by water utilities. The progressive pricing, although preserves the convexity property on the budget set, induces the consumer budget constraints be non-linear, what violates the classical assumption of exogeneity of the explanatory variables required by the ordinary least squares method. An important conclusion is that price elasticity of water consumption is closely unitary.