An experimental approach to measuring consumer preferences for water charges

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.

Automated summary

This paper describes a collaborative research with OECD and Scotland's water industry, using randomized behavioral experiments to investigate preferences for water charges. The study reveals that households dislike delaying impending price increases. The research demonstrates how behavioral experiments can contribute to empirically informed regulation.