by Jesper Akesson, Robert W. Hahn, Rajat Kochhar, Robert D. Metcalfe
Water suppliers are showing greater interest in using residential water audits to promote conservation. Yet there is limited causal evidence on their effectiveness, persistence, and welfare implications. We address this gap using a natural field experiment in the United Kingdom that randomly assigns 45,000 households to receive different behavioral encouragements to complete an online home water audit. Our analysis yields three main findings. First, financial incentives substantially increase audit take-up and lead to large short-run reductions in water
use: among compliers, consumption falls by about 17 percent over a two-month period. The size of the incentive matters for participation but not for the magnitude of conservation. Second, conservation effects attenuate rapidly, becoming undetectable after roughly two months. As a result, the intervention yields small welfare gains, with per capita net benefits typically below £1 under a wide range of assumptions. Third, targeting high-use households roughly doubles short-run conservation effects but remains insufficient to generate sizable welfare gains because conservation does not persist. Overall, while audits and incentives induce meaningful shortrun conservation, their policy value depends critically on whether these effects persist.