Information provision and consumer behavior: A natural experiment in billing frequency

Casey Wichman

Journal of Public Economics, 2017, vol. 152, issue C, 13-33

Abstract: 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% 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% of annual water expenditures. Heterogeneous treatment effects suggest increases in outdoor water use.

Keywords: Information provision; Billing frequency; Price and quantity perception; Natural experiment; Water demand; Conservation; Welfare (search for similar items in EconPapers)
JEL-codes: D12 D61 H42 L95 Q21 Q25 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (52)

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Related works:
Working Paper: Information Provision and Consumer Behavior: A Natural Experiment in Billing Frequency (2016)
Working Paper: Information Provision and Consumer Behavior: A Natural Experiment in Billing Frequency (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:152:y:2017:i:c:p:13-33

DOI: 10.1016/j.jpubeco.2017.05.004

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