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Maintaining the Common Pool: Voluntary Water Conservation in Response to Increasing Scarcity

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  • Emma Aisbett

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  • Ralf Steinhauser

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Abstract

Water is a classic common pool resource, especially during drought. This paper studies the impact of changing storage levels on urban water usage in the context of a prolonged drought and an extensive public information campaign which emphasized communal responsibility for maintaining ‘dam levels’. We identify a substantial voluntary conservation response to changing storage levels. The paper thus contributes a rare piece of real-world, behavioral evidence that voluntary conservation varies with the need for such action. Our findings also imply that estimates of price elasticity may be biased and welfare costs of mandatory restrictions may be overstated in many studies.

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Bibliographic Info

Paper provided by Australian National University, College of Business and Economics, School of Economics in its series ANU Working Papers in Economics and Econometrics with number 2011-554.

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Length: 18 Pages
Date of creation: Sep 2011
Date of revision:
Handle: RePEc:acb:cbeeco:2011-554

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  1. R. Quentin Grafton & Michael B. Ward, 2008. "Prices versus Rationing: Marshallian Surplus and Mandatory Water Restrictions," The Economic Record, The Economic Society of Australia, vol. 84(s1), pages S57-S65, 09.
  2. Jasper M. Dalhuisen & Raymond J. G. M. Florax & JHenri L. F. de Groot & Peter Nijkamp, 2003. "Price and Income Elasticities of Residential Water Demand: A Meta-Analysis," Land Economics, University of Wisconsin Press, vol. 79(2), pages 292-308.
  3. Emma Aisbett & Ralf Steinhauser, 2011. "Does anybody give a dam? The importance of public awareness for urban water conservation during drought," Environmental Economics Research Hub Research Reports 10100, Environmental Economics Research Hub, Crawford School of Public Policy, The Australian National University.
  4. Renwick, Mary E. & Green, Richard D., 2000. "Do Residential Water Demand Side Management Policies Measure Up? An Analysis of Eight California Water Agencies," Journal of Environmental Economics and Management, Elsevier, vol. 40(1), pages 37-55, July.
  5. Kjell Arne Brekke & Snorre Kverndokk & Karinen Nyborg, 2000. "An Economic Model of Moral Motivation," Discussion Papers 290, Research Department of Statistics Norway.
  6. Sheila Olmstead & W. Michael Hanemann & Robert N. Stavins, 2007. "Water Demand Under Alternative Price Structures," NBER Working Papers 13573, National Bureau of Economic Research, Inc.
  7. R. Quentin Grafton & Tom Kompas, 2007. "Pricing Sydney water ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 51(3), pages 227-241, 09.
  8. David Hensher & Nina Shore & Kenneth Train, 2006. "Water Supply Security and Willingness to Pay to Avoid Drought Restrictions," The Economic Record, The Economic Society of Australia, vol. 82(256), pages 56-66, 03.
  9. Isaac, R Mark & Walker, James M, 1988. "Group Size Effects in Public Goods Provision: The Voluntary Contributions Mechanism," The Quarterly Journal of Economics, MIT Press, vol. 103(1), pages 179-99, February.
  10. Paul J. Ferraro & Juan Jose Miranda & Michael K. Price, 2011. "The Persistence of Treatment Effects with Norm-Based Policy Instruments: Evidence from a Randomized Environmental Policy Experiment," American Economic Review, American Economic Association, vol. 101(3), pages 318-22, May.
  11. Greg Halich & Kurt Stephenson, 2009. "Effectiveness of Residential Water-Use Restrictions under Varying Levels of Municipal Effort," Land Economics, University of Wisconsin Press, vol. 85(4), pages 614-626.
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