In this study, I estimate a causal effect of increased billing frequency on consumer behavior. I exploit a natural experiment in which residential water customers switched exogenously from bimonthly to monthly billing. Customers increase consumption by 3.5-5 percent in response to more frequent information. This result is reconciled in models of price and quantity uncertainty, where increases in billing frequency reduce the distortion in consumer perceptions. Using treatment effects as sufficient statistics, I calculate consumer welfare gains equivalent to 0.5-1 percent of annual water expenditures. Heterogeneous treatment effects suggest increases in outdoor water use.
Do Information Nudges Help Conserve Water?
In the past decade or so, there has been a strong push for using information to “nudge” consumers to conserve residential water and electricity. Th...
On the Issues: Water Management, Building Electrification, and More
Connecting this week's environmental and energy news to RFF's economic research
Addressing Quality, Affordability, and Climate Change Issues in US Water Policy
More than $1 trillion must be invested in US water infrastructure over the next two decades to maintain current levels of operation. How can the US effectively address its water infrastructure challenges?