Working Paper: NBER ID: w20362
Authors: Anita Castledine; Klaus Moeltner; Michael Price; Shawn Stoddard
Abstract: 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.
Keywords: Outdoor watering; Water conservation; Multiequation system; Bayesian estimation; Posterior simulation
JEL Codes: C11; C30; Q25; Q58
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Outdoor watering restrictions (OWRs) (Q25) | Residential water use (L95) |
| Assigned watering schedule (Q25) | Water use (Q25) |
| Flexible watering pattern (Q25) | Water use (Q25) |
| Policy change (additional watering day) (Q25) | Peak water use (L97) |
| Policy change (additional watering day) (Q25) | Overall weekly consumption (E21) |