22 January 2009

Shower Incentives

A reader who works at a utility sent me this letter [click to enlarge]:
The writer is anxious that clubs do more to conserve water because other members do not have the intrinsic desire to conserve that he has (the "20/80 rule"). But clubs may not want to ask members to conserve if that will drive them to the competition (the "plastic bag problem").

The command and control solution would have all clubs install water-saving devices. The market solution would have them pay more as water consumption/member rose above the median for similar businesses (benchmark competition).

Bottom Line: It's hard to force people to do the "right" thing when the "wrong" thing is so easy and/or cheap...

1 comment:

  1. Since you didn't, I'll do it for you: Raise prices!! If prices are high enough, clubs will have to find a means for reducing water consumption costs or raise prices for patrons. Both of which would result in reduced consumption of water (the latter due to fewer patrons).

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