 Economic incentives and conservation: Crowding-in social norms in a groundwater commonsJournal of Environmental Economics and Management, 2018, vol. 90, issue C, 147-174 Abstract: Price-based interventions can be corrective where users extract from a common resource, but may also impact existing social norms, often crowding them out. In contrast, I find a pumping fee implemented by a group of irrigators in Southern Colorado effectively crowds-in pro-conservation norms, enhancing the financial incentive's impact. Using a unique, spatially oriented panel-data set of groundwater wells, I separate the direct role of increased pumping costs from the indirect effect transmitted through altered conservation norms. To quantify conservation behavior, I estimate how pumping at one well responds to pumping at nearby wells – using instrumental variables to address simultaneity bias – and interact that behavior with a difference-in-difference framework to assess the influence of the intervention. In the preferred specification, the fee directly accounts for approximately 74% of the reduced pumping and the remaining 26% comes from crowding-in conservation norms. Keywords: Irrigation; Groundwater; Climate change; Conservation; Social norms (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jeeman:v:90:y:2018:i:c:p:147-174 DOI: 10.1016/j.jeem.2018.04.007 Access Statistics for this article Journal of Environmental Economics and Management is currently edited by M.A. Cole, A. Lange, D.J. Phaneuf, D. Popp, M.J. Roberts, M.D. Smith, C. Timmins, Q. Weninger and A.J. Yates More articles in Journal of Environmental Economics and Management from Elsevier |
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