Panel Paper: Heterogeneity In Household Response to Non-Price Water Conservation Policies: Evidence From Panel Micro Data

Saturday, November 10, 2012 : 4:10 PM
Adams (Sheraton Baltimore City Center Hotel)

*Names in bold indicate Presenter

Casey Wichman, Laura Taylor and Roger von Haefen, North Carolina State University

Non-price water conservation polices are popular instruments for achieving residential demand reductions during times of drought, yet little is known about their distributional impacts.  To ascertain how different households respond to these policies, we merge 30 months of household billing data with survey responses about demographic and landscape characteristics to analyze watering restrictions implemented around the 2007 drought in North Carolina.  Our empirical results suggest that voluntary and mandatory watering restrictions reduced average monthly household water demand by 1-4% and 4-9%, respectively.  We found no statistical evidence that these reductions were correlated with income, but households with automatic irrigation systems reduced their consumption by 7% more than households without irrigation systems when faced with mandatory restrictions.  Moreover, results from quantile regressions suggest that high-consumption households are more responsive to mandatory policies than households in lower quantiles of consumption.