Analyzing the Effect of Mandatory Water Restrictions on Water Usage

As water rights and water usage become an ever more important part of municipalities’ and states’ way of life, it becomes important to understand what policies can be effective for encouraging conservation of water. One method that has been employed at various times and throughout numerous communities is to limit outdoor watering days. We use a dataset with over 3 million property-month observations during the 2007–2015 period in Norman, Oklahoma, to identify whether the periodic implementation of mandatory water restrictions reduces water usage. Our data allow us to exploit variance in the timing of these water restriction programs. Our findings indicate that this policy reduces water consumption by 0.7 % of total water consumption. Additionally, we use home assessment prices to identify heterogeneity in this response, finding that high priced homes are more responsive to water use restrictions.