Abstract
The introduction of a volumetric-pricing has been a critical
intervention in household water conservation programs. However, it is
typically impossible to observe how individual households respond to
introducing a price signal as metering and billing start simultaneously.
We report results from a near-ideal quasi field experiment wherein we
measured daily water use both before and after the introduction of
volumetric pricing (n = 59,563). As expected, the introduction of
volumetric pricing (that replaced the previous fixed fee regime)
resulted in an overall reduction in aggregate water use. However, the
aggregate conservation effect of volumetric pricing (5%,
p<.01) masks how nearly half of households increased water
use. Further, a large share of households consuming above the median in
the fixed price regime further increased water use. Using daily
household-level water use data at three metered points for each
household, we also detected that more than a third of all households
increased water usage after the water bill was delivered. Triangulating
our findings using multiple methods, including fixed effects panel and
intervention time series, we also uncover key drivers of price response,
such as water curtailment habits and a prior non-price intervention. The
heterogeneous price response framework that we develop here reveals a
large potential to design water conservation programs that combine price
and non-price interventions to seal leaky water conservation buckets.