The impact of smart meters on residential water consumption: Evidence from a natural experiment in the Canary Islands

Claudio Daminato, Eugenio Diaz-Farina, Massimo Filippini and Noemi Padrón-Fumero

Resource and Energy Economics, 2021, vol. 64, issue C

Abstract: Smart meters can promote behavioral changes and water conservation by improving information and providing feedback about water consumption to households. In this paper, we evaluate a large-scale programme implemented by the municipal water company of La Laguna (Tenerife). Exploiting quasi-experimental variation brought about program, we estimate the effect of water meter replacement on measured water consumption and the behavioral effect of the installation of the smart metering technology allowing households to access daily water consumption and real-time feedback through an online portal. Our main empirical analysis employs a difference in differences identification strategy and uses annual consumption data from 51,674 households observed over 10 years. We find a positive effect of water meter replacement on measured water consumption. Our main finding is that providing access to the smart metering technology induces households to reduce consumption by around 2% on average. Our results point to consumers’ engagement with the information portal as the main mechanism behind the observed behavioral response.

Keywords: Water conservation; Behavioral change; smart meter; natural experiment (search for similar items in EconPapers)
JEL-codes: D12 Q25 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:resene:v:64:y:2021:i:c:s0928765521000063

DOI: 10.1016/j.reseneeco.2021.101221

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