Urban Water Restrictions: Attitudes, Information and Willingness to Pay

In most urban cities across Australia, water restrictions remain the dominant policy mechanism to restrict urban water consumption. The extensive adoption of water restrictions over several years means that Australian urban water prices have consistently not reflected the opportunity cost of water (Edwards 2008). Given the generally strong political support for water restrictions and the likelihood that they will persist for some time, there is value in understanding householders’ attitudes in this context. More specifically, identifying the welfare estimate associated with avoiding urban water restrictions entirely would be a non-trivial contribution to our knowledge of the costs that attend them. This paper employs the results from the stated preference technique contingent valuation to investigate consumers’ willingness to pay to avoid urban water restrictions. It also investigates the influence that cognitive and exogenous dimensions have on utility gain associated with avoiding water restrictions. Accordingly, discussion provides some salutary insights into the impact of this policy mechanism on economic welfare