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Input Efficiency as a Solution to Externalities: A Randomized Controlled Trial

Author

Listed:
  • Alpízar, Francisco

    (Wageningen University)

  • Del Carpio, Maria Bernedo

    (University of Maryland)

  • Ferraro, Paul J.

    (Georgia State University)

Abstract

Resource-conserving technologies are widely reported to benefit both the environment and the people who adopt them. Evidence for these “win-win” claims comes largely from modeling or nonexperimental designs, and mostly from the energy sector. In a randomized trial of water-efficient technologies, the ex-ante engineering estimate of water use reductions was three times higher than the experimental estimate, a divergence arising from engineering and behavioral reasons other than the rebound effect. Using detailed cost information and experimentally elicited time and risk preferences, we infer that the private welfare gains from adoption are, on average, negative, implying no “efficiency paradox.”

Suggested Citation

  • Alpízar, Francisco & Del Carpio, Maria Bernedo & Ferraro, Paul J., 2021. "Input Efficiency as a Solution to Externalities: A Randomized Controlled Trial," EfD Discussion Paper 21-5, Environment for Development, University of Gothenburg.
    • Handle: RePEc:hhs:gunefd:2021_005
    as

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    More about this item

    Keywords

    common pool resource; efficiency gap; field experiment; product adoption puzzle;
    All these keywords.

    JEL classification:

    • D00 - Microeconomics - - General - - - General

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