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An experimental approach to measuring consumer preferences for water charges

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  • Belton, Cameron A.
  • Robertson, Deirdre A.
  • Lunn, Peter D.

Abstract

Regulators acting on behalf of the public need to understand the interests of the people they represent. This paper describes a collaboration with the OECD and Scotland's water industry to deploy randomised behavioural experiments to investigate preferences for water charges. In a study conducted online (n = 500) and face-to-face (n = 100), participants rated price trajectories for acceptability, where the temporal pattern, presentation, magnitude of increase and provision of aggregated information were experimentally manipulated across presentations and participants. Results showed that households dislike putting off impending price increases. The study demonstrates how behavioural experiments can support more empirically informed regulation.

Suggested Citation

  • Belton, Cameron A. & Robertson, Deirdre A. & Lunn, Peter D., 2022. "An experimental approach to measuring consumer preferences for water charges," Utilities Policy, Elsevier, vol. 76(C).
    • Handle: RePEc:eee:juipol:v:76:y:2022:i:c:s0957178722000406
    DOI: 10.1016/j.jup.2022.101375
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    More about this item

    Keywords

    Behavioural economics; Customer engagement; Regulation; Consumer preferences;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General

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