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Applying The Stick To Excessive Water Use
Applying The Stick To Excessive Water Use
Applying The Stick To Excessive Water Use
group-size matter?
Evidence from a water fines program in Colombia
Headlines from Colombian national press published between 2015 and 2016. (i) “El Niño phenomenon has been
intensified over the country”, El Espectador, 10/12/2015. (ii) “Watersheds deterioration, the cause of droughts” El
Espectador, 01/20/16. (iii) “DNP proposed fusion of water supply systems” Portafolio 10/20/15.
Headlines from Colombian national press published between 2014 and 2016. (i) “In 13 regions the excessive water
use will be punished” , Et TIempo, 07/29/2014. (ii) “El Niño phenomenon has been intensified over the country”, El
Espectador, 10/12/2015. (iii) “Households sanctioned for excessive water use accounts for 1,25 millions” El
Espectador, 03/09/16.
An JD
increase
Lopez in the group size canthe
Applying undermine
stick cooperation,
July so it
11, 2017 3 / 27
What I do
1 Motivation
3 Identification Strategy
4 Results
5 Conclusions
Residential water demand represents 8.2% of the total, but has the
highest losses (31%) (IDEAM, 2014).
There are 2763 providers managed by 4 types of organization:
Community endeavors (58.4%), private or mixed companies (21.6%),
and government directly (20%) (SUI, 2016).
Largest municipalities have public and/or private providers with the
highest efficient levels and positive returns (Superservicios, 2014).
Small providers are managed by community or local government with
deficiencies in accounting, management, and scarce investment
resources (Superservicios, 2014).
Water has a high social cost service: approx. 85% of population
receive subsidies for almost the half of consumption.
(a) Magdalena-Cauca river basin location and affected areas (b) Distance from river
Monthly panel data for 1250 water supply systems in Colombia from
January 2011 to December 2015 (SUI- Superservicios, 2016).
I Information is self-reported, though is mandatory.
I Problems of missing observations and measurement error, at some
moments of sample.
F Systems with high share of missing values were excluded, leaving 964
systems.
F Observation above percentile 99 or below percentile 1 within system.
Additional information at municipal level (CEDE-Uniandes) and
climatic variables (IDEAM, 2016).
(a) Average water consumption by size of provider. (b) Average water consumption by type of provider
(a) Histogram water consumption/user a year before the (b) Histogram water consumption/user a year after the pro-
program gram
(a) Water consumption per number of users. Lineal fit. (b) Water consumption per number of users. No-lineal
fit.
Distance from
Magdalena River p-value
(km)
<50 0.54
<100 0.10
<150 0.14
<200 0.19
<250 0.11
<300 0.11
<350 0.10
<400 0.09⇤
<450 0.08⇤
<500 0.08⇤
⇤ p < 0.1, ⇤⇤ p < 0.05, ⇤⇤⇤ p < 0.01
0
Consijt = 0 + 1 Userijt + 2 Finesiit + 3 Userijt xFinesijt + Xit ↵ + i + t + "it
⌧= 2 + 3 Userijt
(a) Change in consumption / Public Utilities (b) Change in consumption / commercial org.
Notes: Net effect of fines program as a function of users per type of provider. Red dash line in x
axis represent the mean of users per type.
The causal impact of water fines program and its cross effect with the
number of users on the residential water consumption was analyzed.
Water supply systems affected by the fines program presented a
reduction on residential water consumption, in contrast with the
control group.
In presence of program, reduction on residential water consumption
becomes lower as numbers of users increase
This results holds when the provider is a public utility.