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The existing literature on nonresidential water demand has primarily employed cross‐sectional models based on time‐aggregated data. In this study, we analyze panel data models of commercial water demand that build on monthly observations of water use and marginal prices for individual customers. This allows for a closer investigation of the temporal aspects of commercial water demand. We show that commercial water demand can exhibit strong seasonal patterns. These temporal consumption patterns aggravate simultaneity problems associated with block pricing if they are not explicitly accounted for in demand specifications.
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Moeltner et al. (2004) studied this question.
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