NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Free to Choose: Promoting Conservation by Relaxing Outdoor Watering Restrictions

Anita Castledine, Klaus Moeltner, Michael Price, Shawn Stoddard

NBER Working Paper No. 20362
Issued in July 2014
NBER Program(s):   EEE

Many water utilities use outdoor watering restrictions based on assigned weekly watering days to promote conservation and delay costly capacity expansions. We find that such policies can lead to unintended consequences - customers who adhere to the prescribed schedule use more water than those following a more flexible irrigation pattern. For our application to residential watering in a high-desert environment, this "rigidity penalty" is robust to an exogenous policy change that allowed an additional watering day per week. Our findings contribute to the growing literature on leakage effects of regulatory policies. In our case inefficiencies arise as policies limit the extent to which agents can temporally re-allocate actions.

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Document Object Identifier (DOI): 10.3386/w20362

 
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