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Can Information Reduce Nonpayment for Public Utilities? Experimental Evidence from South Africa

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  • Andrea Szabo

    ()
    (University of Houston)

  • Gergely Ujhelyi

    ()
    (University of Houston)

Abstract

Nonpayment for public utilities is an important constraint to expanding service access in developing countries. As a potential policy response, this study implements and evaluates a randomized water education campaign in a low income peri-urban area in South Africa. We estimate substantial treatment effects: on the order of a 30% increase in payments over a three-month period. Surprisingly, these effects are not driven by an increase in households’ knowledge. We consider various possible explanations, and argue that the intervention likely had "nudging" effects on households. Our findings have important implications for understanding energy conservation and other public information campaigns.

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File URL: http://www.uh.edu/econpapers/RePEc/hou/wpaper/2014-114-31.pdf
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Bibliographic Info

Paper provided by Department of Economics, University of Houston in its series Working Papers with number 2014-114-31.

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Date of creation: 21 Apr 2014
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Handle: RePEc:hou:wpaper:2014-114-31

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Postal: Houston TX 77023
Web page: http://www.uh.edu/class/economics/
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Keywords: nonpayment; information; water conservation;

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  1. Montek S. Ahluwalia, 2002. "Economic Reforms in India Since 1991: Has Gradualism Worked?," Journal of Economic Perspectives, American Economic Association, vol. 16(3), pages 67-88, Summer.
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  9. Esther Duflo & Emmanuel Saez, 2002. "The Role of Information and Social Interactions in Retirement Plan Decisions: Evidence from a Randomized Experiment," NBER Working Papers 8885, National Bureau of Economic Research, Inc.
  10. Ian Ayres & Sophie Raseman & Alice Shih, 2009. "Evidence from Two Large Field Experiments that Peer Comparison Feedback Can Reduce Residential Energy Usage," NBER Working Papers 15386, National Bureau of Economic Research, Inc.
  11. Katrina Jessoe & David Rapson, 2014. "Knowledge Is (Less) Power: Experimental Evidence from Residential Energy Use," American Economic Review, American Economic Association, vol. 104(4), pages 1417-38, April.
  12. Ian Ayres & Sophie Raseman & Alice Shih, 2013. "Evidence from Two Large Field Experiments that Peer Comparison Feedback Can Reduce Residential Energy Usage," Journal of Law, Economics and Organization, Oxford University Press, vol. 29(5), pages 992-1022, October.
  13. Jalan, Jyotsna & Somanathan, E., 2008. "The importance of being informed: Experimental evidence on demand for environmental quality," Journal of Development Economics, Elsevier, vol. 87(1), pages 14-28, August.
  14. Allcott, Hunt, 2011. "Social norms and energy conservation," Journal of Public Economics, Elsevier, vol. 95(9-10), pages 1082-1095, October.
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