Behavioural nudges for water conservation in unequal settings: Experimental evidence from Cape Town

Abstract

This study addresses the use of behavioural nudges in reducing households' use of water across a large sample (>360,000 households) of domestic users. The impacts of several behavioural interventions are estimated for residential water consumption in Cape Town, South Africa, during the onset of a three-year drought considered to have been the worst in a century. Since income distribution is a key issue in South Africa, the paper also examines whether average treatment effects are heterogeneous across the income spectrum. Behavioural messages did affect water use, with an average reduction of between 0.6 and 1.3 per cent across the various treatments after 6 months. The most effective nudges were those that officially recognised a household's water conservation efforts (social recognition) and those that appealed to households to act in the public interest (public good). Between-treatment test results indicate that social recognition significantly outperformed other treatments. Treatment effects were sensitive to income distribution; specifically, wealthier households were more responsive to social incentives such as public recognition of water conservation, appeals to the public good, and social norm comparisons, while financial feedback nudges also drive behaviour in the low-middle income range. Households in the lowest income group were unresponsive to the nudges. Overall, behavioural nudges played a role in reducing households' water consumption in the City of Cape Town and particularly in wealthier households that typically consume significantly more water. Our results show that the long-term reductions in water usage were over and above those attributable to rising tariffs and increasingly stringent physical restrictions and campaigns introduced as the drought unfolded.