Research

Publications

DeMaagd, Nathan, Peter Fuleky, Kimberly Burnett, Christopher Wada (2022), “Tourism water use during the COVID-19 shutdown: A natural experiment in Hawai‘i”, Annals of Tourism Research

DeMaagd, Nathan, Michael Roberts (2021) "How will climate change affect residential water demand? Evidence from Hawai‘i microclimates", Water Economics and Policy, Editor's Choice

Bremer, Leah L, Nathan DeMaagd, Christopher A Wada, Kimberly B Burnett (2021), “Priority watershed management areas for groundwater recharge and drinking water protection: A case study from Hawai‘i Island”, Journal of Environmental Management

Engels, Jennifer L, Sheree Watson, Henrietta Dulai, Kimberly M. Burnett, Christopher A. Wada, ‘Ano‘ilani Aga, Nathan DeMaagd, John McHugh, Barbara Sumida, Leah L. Bremer (2020), "Collaborative research to support urban agriculture in the face of change: The case of the Sumida watercress farm on O‘ahu", PLOS ONE

Bremer, Leah, Kathleen Farley, Nathan DeMaagd, Esteban Suarez, Daisy Carate Tandalla, Sebastian Vasco Tapia, and Patricio Mena Vasconez (2019), "Biodiversity outcomes of payment for ecosystem services depend on program objectives: lessons from paramo grasslands", Biodiversity and Conservation

Conference Presentations

Reports

DeMaagd, Nathan, and Michael Roberts (2020), "How Will Climate Change Affect Water Demand? Evidence from Hawai‘i Microclimates ", UHERO Reports

DeMaagd, Nathan, and Michael Roberts (2020), "Estimating water demand using price differences of wastewater services ", UHERO Reports

Bremer, Leah, Nathan DeMaagd, Christopher Wada, and Kimberly Burnett (2020), "Identifying priority watershed management areas for groundwater recharge protection on Hawai'i Island", UHERO Reports

Wada, Christopher, Leah Bremer, Nathan DeMaagd, Sarah Medoff, Scott Cloudwatcher, and Kimberly Burnett (2019), "Identifying areas of cost-effective watershed management for groundwater recharge protection on Hawai'i Island", UHERO Reports

Current Projects


Distributional impacts of dynamic pricing transitions for residential electricity customers

Research studying the relationship between various residential electricity pricing structures, such as progressive block pricing and marginal cost pricing, and the effects of household-level solar energy generation.


Automation of code for land cover spread and associated changes to aquifer water yield

The code developed for the Bremer et al. (2020) report above may have many useful applications in other landcover spread-based scenarios. I am working on automating this code for repeated use in a broader range of scenarios. My progress on the project, and the current version of the R package at the center of this project, can be found in the LandCover repository on my GitHub page. This project is currently undergoing significant changes as I develop a web app that will be made available for use to the public. An app with a user-friendly interface will allow those with little to no experience in coding (in R or otherwise) to freely experiment and run simulations of their own. The hope is that this may be used by policymakers and other stakeholders to help make informed decisions regarding changes to landcover and its effect on the environment.


Do two wrongs make a right? Scarcity pricing, marginal user cost, and the under-consumption of water in the residential sector

Many water utilities only charge consumers enough to recover the associated fixed and variable costs of providing the water. This means the scarcity of water is often ignored, leading to prices below the efficient level. By not incorporating this so-called marginal user cost in the price of water, customers may tend to over-consume relative to a long-term welfare-maximizing quantity. However, at the same time, the "fixed price plus increasing block" pricing scheme used by many utilities may cause many households to under-consume water: due to high monthly fixed prices, many households experience an average price that is larger than marginal price for their level of consumption. There is evidence that suggests households respond to this average price rather than marginal price, which would imply in this case that present-day household utility can be increased by consuming more water. In this article, I analyze residential water use on the Hawaiian island of O'ahu. Using household-level data and a heterogeneous demand model I find that, even without consideration for scarcity being explicitly included in the pricing scheme, households in aggregate are consuming less than the socially-efficient amount due to a response to a large average price. This result varies by household, however. Due to the current block pricing on O'ahu, the majority of households are in the first block of consumption where block prices are low. These consumers would see a reduction in long-term deadweight loss by increasing consumption. That is, their consumption is lower than optimal, even after considering the fact that scarcity pricing is absent from the current pricing scheme. Conversely, those households in higher blocks, where the volumetric charge is much larger, may see an increase in consumer surplus by decreasing consumption. My sensitivity analyses investigate how efficient consumption and deadweight loss are affected by demand elasticity estimates and marginal user cost estimates. I discuss these findings in the context of consumer welfare, policy, and resource sustainability.


Estimating water demand using price differences of wastewater services

Many homes in Hawai'i use cesspools and other on-site disposal systems (OSDS) instead of the municipal sewer system. Because bills combine water and waste-water services, and homes with OSDS do not pay for sewer service, OSDS residences have lower monthly bills compared to those with sewer-connected systems. We use this price difference in conjunction with selection on observables and matching methods to estimate the price elasticity of residential water demand. Matching methods indicate that OSDS residences have systematically different characteristics than those with sewer-connected systems, suggesting an imperfect natural experiment. We show traditional methods lead to biased elasticity estimates, even though they are robust when selecting on observables using OLS with or without census tract fixed effects, census block fixed effects, and non-parametric controls trained using cross-validation and a lasso. We then estimate demand using a limited sample of OSDS homes that have sewer-connected neighbors, which gives estimates from -0.06 to -0.08. The neighbors have no systematic differences in other characteristics and estimates are robust to further selection on observables, but the sample differs slightly from population means in their physical characteristics. These more defensible demand elasticity estimates, however, are much more inelastic than estimates not based on comparison of neighbors and are generally more inelastic than previous studies. Taken collectively, the results highlight the susceptibility of demand estimates to omitted variable bias. Highly inelastic water demand suggests that considerably higher prices may be needed for sustainable water management, creating some practical challenges under current regulatory guidance. We also use our results to estimate willingness to accept a tax credit for upgrading an OSDS system, a targeted policy that aims to improve water quality. Regardless of whether consumers respond to average or marginal prices, our estimates imply that the tax credit is far too small to induce voluntary participation in the program. Link to working paper.