The incidence of complex tariff schemes and information on water consumption: a laboratory economic experiment
Marie-Estelle Binet  1, 2, 3@  , Laurent Denant-Boemont  4, *@  , Sabrina Hammiche  5, *@  
1 : Sciences Po Grenoble - Institut d'études politiques de Grenoble  (IEPG)  -  Website
Fondation Nationale des Sciences Politiques [FNSP], Université Pierre-Mendès-France - Grenoble II, Institut d'Études Politiques [IEP] - Grenoble
1030, avenue centrale - Domaine Universitaire - 38400 Saint-Martin-d'Hères -  France
2 : Politiques publiques, ACtion politique, TErritoires  (PACTE)  -  Website
Université Pierre Mendès-France - Grenoble II, Université Joseph Fourier - Grenoble I, CNRS : UMR5194, Institut d'Études Politiques [IEP] - Grenoble, Université Pierre-Mendès-France - Grenoble II
IEP - BP 48 38040 Grenoble cedex 9 -  France
3 : GAEL
Univ. Grenoble Alpes, CNRS, INRA, Grenoble INP, GAEL, 38000 Grenoble, France
Université Grenoble Alpes 621 Avenue centrale -  France
4 : University of Rennes 1  (CREM)
CREM UMR CNRS 6211
Place Hoche 35000 RENNES -  France
5 : University of Rennes 1  (CREM)
CREM UMR CNRS 6211
7 place Hoche, 35000 RENNES -  France
* : Corresponding author

The aim of this paper is to provide experimental evidence for a water consumption bias when households face a complex tariff scheme. To obtain an objective measure of this bias, we design an incentivized laboratory experiment where participants choose a water consumption level under different tariffs schemes, namely, a Constant Block Rate (CBR) and an Increasing Block Rate (IBR). Our first result is that, as expected, the individual consumption bias is positive, indicating an average consumption level above the optimal level. Second, under a progressive tariff scheme, the consumption bias is lower than that under the CBR, which demonstrates the efficiency of price incentives in terms of water conservation. A third important result is that the consumption bias is significantly reduced by providing information recall about marginal prices to participants under the IBR tariff scheme.



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