Does Modernization of Irrigation Infrastructure Create Mental Accounts? Insights from an Exploratory Experiment with Spanish Water User Associations

Patrick Hoffmann and Sergio Villamayor-Tomas
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Patrick Hoffmann: Institut de Ciència i Tecnologia Ambientals, Universitat Autònoma de Barcelona, 08193 Cerdanyola del Vallès, Barcelona, Spain†Centre for Climate Resilience and Faculty of Business and Economics, University of Augsburg, 86159 Augsburg, Germany
Sergio Villamayor-Tomas: Institut de Ciència i Tecnologia Ambientals, Universitat Autònoma de Barcelona, 08193 Cerdanyola del Vallès, Barcelona, Spain

Water Economics and Policy (WEP), 2025, vol. 11, issue 01, 1-28

Abstract: Despite their potential to conserve water, technological modernization investments that increase the efficiency of irrigation systems rarely result in water savings. On the contrary, they oftentimes increase overall water consumption. An important factor for this outcome is that farmers adapt their behavior to the new technological possibilities. If actual water savings are to be achieved, water conservation policies need to be tailored to the logic adapted by water users. In this study, we investigate the applicability and relevance of mental accounting in agricultural water use. In particular, we test whether farmers’ perceptions of water diverge conditional on whether it is supplied naturally or obtained from efficiency gains. We conduct a survey-based experiment among representatives of water user associations in Spain. According to the results, farmers tend to have a stronger sense of ownership over water that is obtained from efficiency increases than over water that originates from natural supply increases; however, they do not intend to use both “types†of water differently. Future policies could strongly benefit from targeting the sense of ownership of higher efficiency gains to achieve water savings. Furthermore, the responsibility of translating efficiency gains into water savings should rather be delegated to water user associations than to individual users.

Keywords: Mental accounting; psychological ownership; efficiency paradox; irrigation; rebound effect (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1142/S2382624X24400022

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