Which Pricing Tools Are Effective to Promote Resource Conservation Behavior? Implications from Residential Water Consumption

Research output: Contribution to journalArticlepeer-review

Abstract

Using a discrete/continuous choice approach, we compare the effectiveness of increasing block rate and uniform rate structures on residential water conservation. Our findings show that residential water demand is more price elastic under increasing block rates, suggesting its potential as a tool for water conservation. However, its effectiveness may be limited if people do not fully understand the structure and instead rely on the average price when making water consumption decisions. Effective communication of the rate structure to consumers is essential to ensure it actively influences water consumption behavior.

Original languageEnglish (US)
Pages (from-to)146-161
Number of pages16
JournalJournal of Agricultural and Resource Economics
Volume50
Issue number1
DOIs
StatePublished - Jan 2025

Bibliographical note

Publisher Copyright:
Copyright 2024 the authors.

Keywords

  • discrete/continuous choice model
  • increasing block rate
  • price elasticity

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