NEWTS

Nudges for Economics of Water Tariffs

Water JPI Joint Call (Step2)

Network - WaterWorks2017
Call - Water JPI 2018 Joint Call Closing the Water Cycle Gap

Project manager: Michel PAUL (Centre d'Economie et de Management de l'Océan Indien)

Carrier for the GRANEM : Xavier Pautrel

Summary

The project aims to provide a socio-economic assessment of green nudging policies, focusing on water consumption controlling and/or proper understanding by the households of the charging system, taking into account adjustments in pricing policy that nudges, by their effects on water demand functions, may generate. From an operational point of view, it consists in developing a microsimulation model, based on econometric estimates of household water demand, to assess socio-economic returns of mix policies, combining nudges and pricing instruments, and identify financially sustainable DSM policies that improve existing pricing of water. The effects of nudges on household water consumptions are examined through the realization of controlled experiments, in laboratory and in the field. Controlled field experiments are deployed on a large scale in Gijon (Spain), Saint Paul (Reunion Island - France) and Sfax (Tunisia). Econometric estimation of residential water demand is carried out to measure basic needs of the households, price-sensitivity of demand and perceived prices of water, and to infer the effects of behavioural interventions on these factors. Using a broad set of appropriate indicators to measure affordability, incentive efficiency and distributional effects, cost benefit analysis are conducted to infer the effects of nudges on the socio-economic performance of the existing pricing system (that may be improved) and propose optimal policies, according to well-defined decision criteria for local public decision-makers, in various frameworks. These methodologies articulate to construct a decision support model that will be posted on line, with an evaluation software package on a web platform.

Partners

1 Project manager - Centre d’Économie et de Management de l'Océan Indien, France
2 Laboratoire d'Economie Appliquée de Grenoble, France
3 Centre de Recherche en Économie et Management, France
4 Groupe de Recherche Angevin en Économie et Management, France
5 Economics Policy Research Unit, South Africa
6 University of Oviedo - Oviedo Efficiency Group, Spain
7 Laboratory for Research in Quantitative Development Economics, Tunisia