Price and Behavioural Signals to Encourage Household Water Conservation in Temperate Climates

Liang Lu, David Deller, Morten Hviid

Research output: Working paper


Water scarcity is a global concern. Even in non-drought environments the
political and economic costs of developing water resources may favour water
conservation. Using a single high price to constrain demand raises distributional
and political challenges. Increasing block tariffs (IBTs) have been proposed as
a potential solution, balancing incentives for water conservation with an
equitable distribution of costs across households. An alternative approach that
may side-step affordability concerns is to use non-price conservation
interventions. We survey the literature on IBTs and behavioural interventions (a
subset of non-price interventions) to assess their effectiveness, thereby
highlighting the operational challenges of implementing effective IBTs. Robust
evidence on behavioural interventions is limited, although, social comparisons
appear to be effective for conservation. We discuss the implications of the
evidence for the UK, a country with a temperate climate. We note that existing
interventions have been typically implemented in response to drought
situations, so one may question the validity of existing evidence for designing
interventions in non-drought situations. We suggest an essential first step
before implementing an IBT is research to understand a locality’s water
consumers and their water demand. That many UK households have an
unmetered water supply presents challenges both for gaining this
understanding of demand and producing an evidence base around behavioural
Original languageEnglish
PublisherCentre for Competition Policy
Publication statusPublished - 2018

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