Residential Water Conservation and the Rebound Effect: A Temporal Decomposition and Investigation

Water conservation in California has been a major subject of concern for agencies in their efforts to satisfy their residential demand while coping with frequent shortfalls, especially in periods of drought. During the 2012-2016 severe drought in California, the state enacted a conservation mandate that imposed specific conservation targets of 4% up to 36% for water utilities. While the utilities met those targets in 2015, water use, on average, has slowly crept up or rebounded subsequently, although not to pre-drought levels. Understanding the manner and degree to which water use rebounds can be critically important for water utilities in their planning and investment decisions. Using a unique panel dataset on single-family residential water use by nearly 20,000 customers of a Northern California water agency from 2013 to 2019, this paper explores the magnitude and character of the rebound effect that occurred after the cessation of a statewide conservation mandate that was imposed on water use in response a severe drought enveloping California from 2014 through 2016. Our results suggest the presence of a significant rebound in water use-of approximately 9% on average-after the conservation mandate ended. Yet, and novel to our research, we find significant heterogeneity in the rebound effects across seasons and water users, with a greater rebound in the warm season months relative to other months and among lower water use households relative to higher water use households. Our results also suggest a significant shift in water use to earlier periods of the day once the mandate was lifted. Understanding the magnitude and variation in rebound effects both temporally and across different types of water users can be useful to water agencies in their efforts to make informed decisions surrounding investments, management, and messaging in response to drought, conservation, and water scarcity.