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This chapter examines the potential of using pricing of water to reduce the demand for water in urban areas, and identifies the physical and socio-economic conditions under which pricing would be economically viable. For this, first, the theoretical arguments in favour of water pricing in urban areas, and the issues associated with pricing water and sewage are discussed. Following this, the estimates of price elasticity of urban water demand based on research available from different parts of the world under various conditions of consumer household income, and under various pricing regimes are reviewed. Subsequently, the status of urban water pricing in selected Indian cities is discussed. Finally, the cost of production of water in 301 towns and cities of India, and the emerging patterns in cost of production vis-à-vis distinct urban typologies are identified.

For many years California has required that most women receive time-and-a-half for hours of work beyond 8 in a given day. In 1980 this daily overtime penalty was extended to men. This change provides a unique opportunity to estimate the impact of an exogenous increase in the relative price of a marginal hour of labor on the demand for hours of work. Analyzing Current Population Survey data from 1973 and 1985, we find that the overtime penalty substantially reduced the amount of daily overtime worked by California men compared to men in other states and to women in California. Our estimates imply that the price elasticity of demand for overtime hours is at least −0.70.

This chapter looks at the impact of support price policy on the income from paddy crop. Markets for agricultural produces in India are mostly unorganized and distorted where farmers are often scrupulously exploited. Also since the elasticity of demand for agricultural commodities particularly foodgrains is less than unit, increased production during bumper harvest brings down the prices of agricultural commodities sharply. But, the support price provided to paddy has come under severe scrutiny for various reasons in recent years. Farmers have been demanding for higher support price for paddy but some economists argue that increase in paddy price is ‘dirty economics and dirtier politics’. With the help of time series data, chapter 4 provides an elegant analysis whether the support price scheme has helped paddy cultivating farmers in terms of increasing their income.