Price perceptions in water demand |
| |
Institution: | 1. Department of Agricultural Economics, Sociology, and Education, Pennsylvania State University, USA;2. Department of Economics, Monash University, Australia;1. Regional Economic & Community Development Officer, Cariboo Regional District, British Columbia, Canada;2. Department of Economics, Memorial University of Newfoundland, Canada;1. School of Environmental and Rural Studies, Pontificia Universidad Javeriana, Colombia;2. Sanford School of Public Policy, Duke University, United States;3. School of Economics and Center for the Study of Security and Drugs (CESED), Universidad de Los Andes, Colombia;1. Department of Resource Economics, University of Massachusetts-Amherst, USA;2. Department of Economics, University of Alaska-Anchorage, USA;3. Institute for State Economy, Nankai University, China;4. School of Public and Environmental Affairs, Indiana University-Bloomington, USA;1. The World Bank, United States;2. Georgetown University, United States |
| |
Abstract: | Economists advocate for using the price mechanism to manage water scarcity, but complex nonlinear rate structures prevalent in markets for municipal water obscure price signals. We conduct a randomized field experiment that jointly elicits knowledge about the cost of water and examines the impact of improved information on demand by linking a survey to water billing records. Half of our sample of 30,000 single family homeowners are randomly sent an invitation to a survey that asks questions about the water bill and the costs of water-use activities (e.g. the cost of taking a shower), and subsequently provides personalized accurate information. Results show that consumers have poor information about the marginal price of water and overestimate the costs of using water. Respondents are relatively better informed about their total bill and water consumption. In aggregate, respondents increase water use in response to the survey, potentially due to learning that water is cheaper than they previously thought. Increased consumption is concentrated among low users who are more likely to over-estimate the costs of using water. |
| |
Keywords: | Water demand Demand elasticity Economics of information Experimental economics Behavioral economics Q21 Q25 Q54 |
本文献已被 ScienceDirect 等数据库收录! |
|