Takeup, Spillovers, and Heterogeneity in Water-Wise Landscaping Incentive Programs
41 Pages Posted: 24 Jul 2023 Last revised: 26 Jul 2023
Date Written: July 15, 2023
In the face of historic drought in the U.S. West, water agencies throughout the region offer rebates to replace thirsty grass lawns, where a majority of residential water ends up, with more drought-tolerant landscaping. Using administrative data on turf replacement rebates, and variation in program generosity, this paper estimates a demand elasticity for rebates of 0.93 and finds that each lawn conversion leads to 0.61 additional conversions in the same neighborhood the following year. Rebate takeup generally increases with wealth, while White and Asian households have the highest baseline takeup, with Black households having less elastic demand. Hispanic rebate applicants are substantially more likely to be denied than others, an effect that is largely mitigated by contractor use.
Keywords: water conservation, rebate, turf replacement, spillover, xeriscape
JEL Classification: H23, Q25, Q28, L95
Suggested Citation: Suggested Citation