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Social Norms Information Treatments in the Municipal Water Supply Sector: Some New Insights on Benefits and Costs

Author

Listed:
  • Celine Nauges

    (TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique)

  • Dale Whittington

    (UNC - University of North Carolina at Chapel Hill, University of Manchester [Manchester])

Abstract
Social norms comparisons are tools that are being used more and more often by energy and water utilities all over the world in order to induce households to conserve resources. Such conservation programs are appealing to utilities since they are an easy-to-implement alternative to raising prices and commonly result in short-term reductions in energy and water use of about 2-5%. However, the welfare effects of social norms programs are rarely discussed and assessed, especially in the context of municipal water supply. The purpose of this paper is to identify the costs and benefits of social norms information treatments (SNITS) to all social groups and to illustrate a conceptual framework for conducting a benefit-cost analysis of social norms treatments in the municipal water sector. We provide plausible estimates for the costs and benefits of social norms treatments to different affected groups in the municipal water supply sector using current knowledge for both developing and industrialized countries in order to show how practitioners can conduct a benefit-cost analysis of an SNIT for a specific water utility. Our calculations show that the outcome of a benefit-cost analysis of an SNIT is highly location-specific and likely subject to substantial uncertainty. We also present a simple benefit-cost analysis of a price increase that would lead to an equivalent initial reduction in household water use. The latter is found to be more likely to result in net benefits to the society as a whole in low- and middle-income countries, but we show that, in this case, households would have to bear most of the costs.

Suggested Citation

  • Celine Nauges & Dale Whittington, 2019. "Social Norms Information Treatments in the Municipal Water Supply Sector: Some New Insights on Benefits and Costs," Post-Print hal-02332548, HAL.
    • Handle: RePEc:hal:journl:hal-02332548
    DOI: 10.1142/S2382624X18500261
    Note: View the original document on HAL open archive server: https://hal.science/hal-02332548
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Hernández, Francisco & Jaime, Marcela & Vásquez, Felipe, 2024. "Nudges versus prices: Lessons and challenges from a water-savings program," Energy Economics, Elsevier, vol. 134(C).
    2. María Ángeles García-Valiñas & Sara Suárez-Fernández, 2022. "Are Economic Tools Useful to Manage Residential Water Demand? A Review of Old Issues and Emerging Topics," Post-Print hal-04067487, HAL.
    3. Brick, Kerri & De Martino, Samantha & Visser, Martine, 2023. "Behavioural nudges for water conservation in unequal settings: Experimental evidence from Cape Town," Journal of Environmental Economics and Management, Elsevier, vol. 121(C).

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    More about this item

    Keywords

    cost-benefit analysis; social norms; water utilities;
    All these keywords.

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • L95 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Gas Utilities; Pipelines; Water Utilities

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