The Effect of Non-pecuniary-based Incentive Mechanisms to Reduce Water Usage at the Household Level and to Achieve Positive Environmental Outcomes

Abstract

There has been a sixfold increase in global water use over the twentieth century. The study answers the question, ‘how can scarce water be saved in an efficient manner?’ The current study uses the non-pecuniary incentive, ‘neighbourhood comparison’, as a tool for giving signals to water users. This study stresses on the negative linkage between water usage by households and ‘neighbourhood comparison’ in the Indian context. The field survey of this study considers household-level data related to water usage. In the present study, it is revealed that ‘neighbourhood comparison’ message causes significant reductions in water consumption per capita.