A fine is more than a price: Evidence from drought restrictions

Bryan Pratt

Journal of Environmental Economics and Management, 2023, vol. 119, issue C

Abstract: This study evaluates whether financial penalties have non-price effects separate from any punishment avoidance behavior. I investigate the effects of a restriction termed ‘mandatory rationing’ on residential water consumers who face differential exposure to the content of the policy. I find a significant response among households who were likely to be fined, but also among households with low likelihood of facing penalties. I provide evidence that this occurs because the policy directly affected consumption through non-price channels. My findings show that fine-based policies can have impacts beyond the targeted population as a result.

Keywords: Water; Public policy; Fines; Conservation; Social pressure; Non-price mechanisms; Spatial spillovers (search for similar items in EconPapers)
JEL-codes: D04 Q25 Q28 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeeman:v:119:y:2023:i:c:s009506962300027x

DOI: 10.1016/j.jeem.2023.102809

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