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

  • Emma Aisbett

    ()

  • Ralf Steinhauser

    ()

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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File URL: https://www.cbe.anu.edu.au/researchpapers/econ/wp554.pdf
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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. Aisbett, Emma & Steinhauser, Ralf, 2011. "Does anybody give a dam? The importance of public awareness for urban water conservation during drought," Research Reports 107850, Australian National University, Environmental Economics Research Hub.
  2. 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.
  3. Grafton, R. Quentin & Kompas, Tom, 2002. "Pricing Sydney water," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 51(3), September.
  4. 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.
  5. 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.
  6. Kjell Arne Brekke & Snorre Kverndokk & Karinen Nyborg, 2000. "An Economic Model of Moral Motivation," Discussion Papers 290, Statistics Norway, Research Department.
  7. R. M. Isaac & J. M. Walker, 2010. "Group size effects in public goods provision: The voluntary contribution mechanism," Levine's Working Paper Archive 310, David K. Levine.
  8. Olmstead, Sheila M. & Michael Hanemann, W. & Stavins, Robert N., 2007. "Water demand under alternative price structures," Journal of Environmental Economics and Management, Elsevier, vol. 54(2), pages 181-198, September.
  9. 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.
  10. 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.
  11. 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.
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