Incentives to water conservation under scarcity: Comparing price and reward effects through stated preferences

Abstract

Focusing on two different European institutional contexts, a stated preference approach is adopted to elicit the willingness to save water under three alternative incentive policies: a water price increase, monetary reward, and symbolic prize. In addition, two water scarcity scenarios, a 'critical' and a 'regular' scenario, are devised to analyze how information on water scarcity moderates the effect of incentives. Empirical results show that users become sensitive to monetary incentives (while they remain insensitive to non-monetary ones) when water is scarce. Batteries of pre-tests on the sample and robustness checks on the results strengthen the reliability of our findings and partially circumvent concerns related to the use of a stated preference approach. The study adds to the literature on the efficacy of economic incentives in the water sector and the role of local factors in explaining water users' response.

Moral Suasion and Economic Incentives: Field Experimental Evidence from Energy Demand

“…physical capital stock is unlikely to explain why we found significant differences in the persistent effects between moral suasion and economic incentives. 16 Table 7 explores the second potential mechanism-behavioral changes in utilization habits. After the experimental period, we asked customers two questions related to this point.…”

“…By contrast, moral suasion had no statistically significant effects on the energy-efficient use of each appliance. 16 An important caveat of this analysis is that customers knew that they were going to receive the treatments only during the experimental period. If customers had experienced their treatments for a longer time, more consumers might have found investment in physical capital stock economical.…”

Moral Suasion and Economic Incentives: Field Experimental Evidence from Energy Demand

“…Finally, Schwartz et al (2013), after sending consumers postcards that stated their electricity usage was being observed, find that the treated customers had a 2.7 percent reduction in electricity usage relative to customers who received nothing. 13 When interpreting the size of the treatment effect, we want to emphasize again that our households were not a random sample of the population. While observable characteristics are not statistically different between the experimental sample and a random sample of the population in Table 1, there can be unobservable factors that are different between the two groups.…”

System Dynamics-Multiple Objective Optimization Model for Water Resource Management: A Case Study in Jiaxing City, China

“…The industrial users will resist the implementation of allocation schemes because of high costs. Economic policies such as water price subsidies, water-saving incentives, and segmented tax rates [69][70][71] may be prudently introduced to improve user acceptance of certain allocation schemes. In addition, the cost coefficients of different types of water were fixed during the simulation period, and the water price was limitedly adjusted to alleviate the water shortage.…”