In this video, I will discuss some interesting research findings on the effect of social norms on household water use. This research was conducted by Professor Paul Ferraro at Georgia State University in the United States, and his co-authors. The more general question we will look at is how information provisions affects behavior. To begin our discussion, it is useful to think about three types of information that one can provide to households in an effort to get them to change their water use. The first is information on technical and behavioral changes that the household could do if they wanted to change their water use behavior. The second is actually to request a household to undertake technical or behavioral changes possibly using moral persuasion. The third is to provide the household information on what other households are doing. This is called providing information on social norms. The first type of information provision is the most neutral. The second and third types are intended to be more focused and persuasive. Let me give you an example on providing information on social norms. There's a new company in the United States called Opower. It recently had its first initial public offering. Opower works with electricity utilities to provide households with information about how their electricity consumption compares to other households in their neighborhood. At the bottom of this slide are two figures that Opower prepares for inclusion on an individual's utility bill. These figures tell the household how its electricity consumption compares to its neighbors. Note that this is individually tailored information for a specific household. Utilities pay Opower for this service because they want customers to reduce their electricity consumption. There are several questions about the effects of social norms information treatments. First, how big are the effects on consumer behavior? Second, what does the information treatment cost? Third, how long does the treatment last? Fourth, what types of households respond the most to information on social norms? This is a new area, area of research in the water sector. What do you think researchers have found? Some of the first evidence on these questions comes from the findings in this paper by Paul Ferraro and his coauthors. The research team carried out a large field experiment in Cobb County, Georgia in the United States near Atlanta. Over 100,000 households participated in the experiment. Next, I'm going to describe the research design. The research team divided their sample into four groups of households. The first group received just factual information on how it could save water. This information was called a tip sheet, because it provided tips on how to save water. The second group received the tip sheet plus a civic duty message designed to persuade the household to conserve water because it was the right thing to do. The third group received the tip sheet plus the civic duty message plus a social norm comparison like the Opower provides for electricity consumption. Except in this experiment, the research team worked with the utility to provide social norm information on water use. The fourth group was the control or baseline households. They did not receive any of these three information treatments. For them, nothing changed. On the next slide I'll show you what the research team used in their information treatments. This is technical information on how to save water. I'm not going to read all of this text now. You can do that later, but I wanted you to see the amount of information provided in the tip sheet before I showed you the results. Next, I'll show you the civic duty message. Again, I won't read all this text, but I want you to have an idea of the type of moral persuasion being attempted. Parts of the text read, we all need to work together to use water wisely. And the message continues, we need your help. Please don't waste water. Remember, every drop counts. Next, I'll show you the information provided on social norms. Basically, households that received the social norm information treatment were told three things: how much water they used, the average amount of water used by their neighbors and how their water use compared to their neighbors in percentage terms. What do you think happened? Let's look at the results. On this table, the rows are the four groups of households. The control households plus the three groups of treatment households. In the far right column, you can see the number of households in each of the four groups. The two columns in the middle report the mean summer household water use in gallons in 2006, before the experiment was conducted. The column to the right of that reports the percentage reductions in the summer of 2007, after the experiment. The take home messages from these results are that the tip sheet alone caused a 0.7 percentage reduction in average water use. The civic duty message plus the tip sheet caused a 2.7% reduction. And treatment three, which included the tip sheet, the civic duty message and the social norms information, caused a 4.8% reduction, much larger than either treatment one or treatment two. Are these big effects or small effects? I think you have to judge this relative to the cost of the intervention, which is actually quite low. If the water utility hit, hits into strong social norm message, that is treatment three, tip sheet, plus civic duty, plus social norm to all household customers served in 2006, the water utility would have saved around 700,000 cubic meters of water in the summer of 2007, which was during a drought. The research team continued their research into 2008 and 2009 to determine how long the effects of the information treatment would last. This table shows that the effects of information treatments one and two had disappeared one year later, by the summer of 2008. But the effects of treatment three with the social norms information decayed much more slowly. There was a statistically significant negative effect in 2009. The research team also addressed the question, who was the most responsive to the strong social norms message. What types of households had the largest reductions in water use? What do you think? It was the heavy water users and the rich households that reduced their water use the most, in response to the social norms information. Note that these two groups overlap. In one sense, this finding makes sense. Households with higher water use were probably able to reduce low value water uses. Rich households probably don't need the money saved by reducing water use so it makes sense that they were responding to the non-price signals. The research team also addressed the question, how are water use reductions achieved. The research team found that water use reductions were achieved in two main ways. First, by reduction in outdoor water use. And second, by continuous behavioral changes. Not one-shot or one-off investments like buying a more water-efficient appliance. The research team concluded that changes in water use occurred from social comparisons, not from knowledge about how the household could benefit personally. To wrap up, I want to emphasize that the magnitude of the reductions in water use due to the provision of social norms may seem small, but you have to compare this to the cost of the information provision. This reduction of about 5% of water use was achieved with a simple modification of information in the household's water bill. An important question for us is whether effects would be similar in a developing country. We don't know the answer yet. There's no published research on this question as yet. But I know one study underway now that is investigating this question, so stay tuned and watch the journals. If I find out the answer I'll tell you in the second module of the course.
