Work

A Large-Scale Field Experiment to Reduce Nonpayments for Water: From Diagnosis to Treatment

Year: 2023

Type: article

Abstract: In a field experiment among 9,823 customers of the Namibian water utility, we implement interventions to reduce nonpayments. The interventions are based on diagnostic surveys to identify key obstacles to payments. They address informational frictions and apply psychological commitment techniques to narrow the gap between customers’ willingness to pay and actual payments. Initially, payments increase by 29% to 55%, making the interventions highly cost-effective. Removing informational frictions has a lasting impact, but the commitment techniques produce only short-term effects. We demonstrate the effectiveness and limitations of behavioral interventions in settings where heavy-handed tools (e.g., disconnecting nonpayers) are difficult to implement.

Source: The Review of Economics and Statistics

DOI: 10.1162/rest_a_01363

Authors: Bettina Rockenbach, Sebastian Tonke, Arne R. Weiss