Social Norms Information Treatments in the Municipal Water Supply Sector: Some New Insights on Benefits and Costs

Dale Whittington and Celine Nauges

No 17-16, EfD Discussion Paper from Environment for Development, University of Gothenburg

Abstract: Social norms comparisons are tools that are being used more and more often by energy and water utilities all over the world in order to induce households to conserve resources. Such conservation programs are appealing to utilities because they are an easy-to-implement alternative to raising prices and commonly result in short-term reductions in energy and water use of about 2-5%. However, the welfare effects of social norms programs are rarely discussed and assessed, especially in the context of municipal water supply. The purpose of this article is to propose a framework for identifying the costs and benefits of social norms comparisons and to provide plausible estimates for these components in the municipal water supply sector, using current knowledge for both developing and industrialized countries. Our calculations show that the outcome of a benefit-cost analysis of a social norms information treatment is highly uncertain and location-specific. We also present a simple benefit-cost analysis of a price increase that would lead to an equivalent initial reduction in household water use. The latter is found to be more likely to generate net benefits to the society as a whole in low- and middle-income countries, but we show that, in this case, households would have to bear most of the costs.

Keywords: social norms; benefit-cost analysis (search for similar items in EconPapers)
JEL-codes: D61 D80 L95 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2017-11-01
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Related works:
Journal Article: Social Norms Information Treatments in the Municipal Water Supply Sector: Some New Insights on Benefits and Costs (2019)
Working Paper: Social Norms Information Treatments in the Municipal Water Supply Sector: Some New Insights on Benefits and Costs (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:gunefd:2017_016

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