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

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  • Emma Aisbett
  • Ralf Steinhauser

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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  • Emma Aisbett & Ralf Steinhauser, 2011. "Maintaining the Common Pool: Voluntary Water Conservation in Response to Increasing Scarcity," ANU Working Papers in Economics and Econometrics 2011-554, Australian National University, College of Business and Economics, School of Economics.
    • Handle: RePEc:acb:cbeeco:2011-554
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    File URL: https://www.cbe.anu.edu.au/researchpapers/econ/wp554.pdf
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    More about this item

    JEL classification:

    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • Q21 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Demand and Supply; Prices
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers

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