Water Resources and Economics

Southwestern arid cities face growing pressure on their available water supplies due to a rapidly increasing population and the impacts of climate change. We evaluate the behavioral effect that the length of residency has on residential water demand in the cities of Reno and Sparks, Nevada. We find that the length of residency has a significant positive effect on households' water consumption: customers that have lived in the area longer consume higher volumes of water, on average. Additionally, social norms, as measured by neighbors' water use, and compliance with outdoor water regulations also significantly and positively influence households water consumption. Moreover, the effect of social norms on outdoor water use is persistent among households with varying length of residency. We discuss the implications of our findings for future water demand and conservation policies.