Journal of Agricultural and Resource Economics
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Rate Structure and Water Conservation
Government rebates provide monetary incentives to encourage consumers’ adoption of eco-friendly technologies. Understanding how consumers perceive the value of rebate is crucial to policy makers. We use the smart irrigation system as an example and design choice experiments that present rebates in two formats: the total device cost and the cost consumers needed to pay versus the total device cost and the rebate value. We find that consumers discount the value of the rebate more when presented with rebate value. Additionally, the framing of incentives has a spillover effect on the perceived value of a seemingly unrelated attribute (i.e., water saving).
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