Demand Side Management Policies for Residential Water Use: Who Bears the Conservation Burden?

Abstract

To assess the potential for urban demand side management (DSM) policies as a water resource management tool, we analyze the extent to which price and alternative policy instruments (such as use and quantity restrictions and subsidies for water efficient technologies) reduce residential demand and their distributional implications by type of household. Using detailed household-level panel data for two California communities, the results suggest that the ultimate effects of DSM policies in terms of the reduction in aggregate demand and distribution of water savings among household classes depend both on the policy instrument selected and the composition of aggregate demand.