Benefits of Conservation Dual Flush Toilet, – $200, two per house ($400 total) – Toilet, 29% of ~25 m 3 / month indoor – Save $16.42 per year, – $328.40 @ 5% pays same! – NET RETURN NEGATIVE!!! BUT – Positive if replacing or new build.
Benefits of Conservation Xeriscape, say 75% less outdoor water. – Save expensive peak water, ~$120 / yr Depends on yard size, etc. – Conversion cost, ~ $8/ft 2 66x120 yard, ~30K convert – $2,400 at 5% pays $120 / yr – NET RETURN NEGATIVE!!! BUT – New yard, incremental cost
Benefits of Conservation Household perspective 1.Save some money (CITY, RWD) – Not enough for replace, but maybe new install. – No savings if not priced (BMID, SEKID, GEID). 2.Avoid penalties or damage – Fine/cutoff if violate outdoor watering bans – Damage risk for sensitive plants 3.Doing good for community / environment.
Benefits of Conservation For utility, delay capital costs. – Delay $20M one year, save $400K interest (5%). – Kelowna, reduce average water use 2.5% per year, buy 20 yrs.
Research Project Data collection – Canada411 address and phone number harvest, Stratified by water provider and near borders. – Telephone survey with internet option (2008), 80% respondents chose internet! – Mail survey with internet option (2009), – Forgot to ask responent age! Follow up telephone contact. – 516 returned surveys (337 with age).
Conservation Outdoor Conservation Investment CountPercent Water Less26151 Low water grass6913 Moisture Probe122 Timed Irrigation35669 Rain Barrel6112 Greywater System20 Soil Amendment20039 Pool Cover5811 Gravel16432 Xeriscaping13426
Conservation Conservation Behaviors CountPercent Scrape Dishes25750 Wash in Basin20339 Turn off tap while brushing teeth41480 Turn shower off when soaping up7414 If it is yellow, let it mellow, …24848 Use dishwasher when full43584 Use laundry machine when full45588
Conservation BMIDSEKIDGEIDRWDCITYOTHER In House2.752.622.442.252.432.66 On Yard2.522.592.512.692.492.80 Behavior4.294.024.013.883.714.29 No significant difference across providers – Measure total number of activities undertaken. What, no price effect!!! – Examine interactions – Examine matched sample.
Matched Samples Question: If I am near a border, do I act like people far from the border? OR Is my behavior influenced by behavior of people nearby who pay differently? Answer: Compare similar people near and away from border.
Matched Samples Matching 1.Near border = treat. 2.Away = control 3.For each near obs., find similar far obs. 4.Compare variables of interest between treatment and control.
Matched Samples Comparing within, not between purveyors. – All in group face same rate. – All in group get same bills, other info from purveyors. – Between purveyors, uncertain of cause Price effect Information campaign effect Subsidy programs Different rules (lawn watering, etc.)
Matched Samples GroupTreatmentVariableNDiff (N)P-valueDiff (2N)P-Value FLATnear PAYInside210.18180.63360.19050.4827 FLATnear PAYOutside420.45450.32370.48080.2373 FLATnear PAYBehave210.68180.10920.54760.0413 PAYnear FLATInside42-0.55320.0626-0.60470.0075 PAYnear FLATOutside21-0.27660.4504-0.52330.0507 PAYnear FLATBehave420.53190.15440.34880.1622 – Effect direction (mostly) consistent with price. – Existence consistent with social influence. – PRICE MATTERS AND NEIGHBOURS MATTER!
Implications Volumetric pricing has an influence – All else equal, 3 of 4 undertake one more conservation activity indoor and one outdoor. Neighbour effects powerful. – Price effect not dominant. Policy can use neighbour effect – Identify good behavior and recognize locally – Provide comparison info vs good behavior.