Heterogeneous Responses to Water Conservation Programs: The Case of Residential Users in Los Angeles
AbstractWe propose a detailed analysis of heterogeneity in householdsâ€™ responses to water conservation programs (price increase, voluntary and mandatory conservation) during periods of water shortage. Using a unique dataset covering water consumption of all residential users in Los Angeles (California) during the drought (1988-1992), we show that households generally were responsive to the conservation measures but that the magnitude of householdsâ€™ responses varies depending on the instrument and on householdsâ€™ characteristics, in particular the size of their lot. Price elasticity is estimated between â€“0.29 and â€“0.47 in the high season (June-October), and between 0 and â€“0.19 in the low season (November-May). Results suggest that the voluntary conservation program [resp. mandatory conservation program] induced a reduction in water use which varies from 1 to 13% [resp. 21% to 29%] depending on the season and the size of the lot. The achieved reduction in consumption is however very similar across households. These data also allow us to compare the effectiveness of price and nonprice policies in terms of water savings. Finally, welfare calculations suggest that households with the smallest lot sizes (and lowest income) suffered the greatest loss during the implementation of the water conservation programs.
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Bibliographic InfoPaper provided by Department of Agricultural & Resource Economics, UC Berkeley in its series Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series with number qt1s43k3fd.
Date of creation: 25 Aug 2005
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water conservation; residential use; heterogeneity in behavior; panel data.;
Other versions of this item:
- Hanemann, W. Michael & Nauges, Celine, 2005. "Heterogeneous responses to water conservation programs : the case of residential users in Los Angeles," CUDARE Working Paper Series 1026, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy.
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