Drop by Drop: Behavioral Economics and Water Scarcity

“If people understand the underlying problem and its dimension, why do they not act in accordance with that attitude? This disparity in known as intention-behavior gap, and it happens because our behavior is also influenced by other factors besides intentions and attitudes”

We all know the climate is changing, and we have started to feel the effects of that change. Meteorological phenomena are becoming ever more severe, and it seems to be hitting Portugal hard. The past year has been a good example of it: by June the 30th 2017, a state of severe agrometeorological drought was declared in the territory of continental Portugal, a situation that became absolutely critical by the end of October 2017, when 75.2% of the territory was officially in a state of extreme drought and the remaining 24.8% going through a severe one, being that the driest October in the last 20 years; on the other hand, in March 2018 the country witnessed an amount of precipitation 4.4 times greater than the average for that month, with temperatures abnormally low during what was the second rainiest month of March since 1931. This escalation brings ever more extreme meteorological phenomena, which severely affect water availability in Portugal: in 2016, the government's annual environmental report showed great disparities in the availability of water throughout the country's reserves, some of them reaching moderate levels of scarcity.

Meteorological phenomena are becoming more extreme and unpredictable. Despite the heavy rains last march, Portugal went through a period of almost 12 months with little or no rain last year. Consequently, the problem is not an absolute absence of precipitation. The matter is that droughts are increasingly prolonged, which brings water reserves down to minimum levels. Sure, it eventually rains, but until then water availability is reduced. In other words, one month of intense rainfall does not disprove water scarcity, in the same way as an unusually cold month does not deny global warming. For this reason, we must be more responsible and careful with our water usage, to ensure that existing reserves are enough to face longer droughts.

More than a Portuguese problem, this is a worldwide issue. The European Commission predicts that by 2030 half of the Union's hydrographic basins will reach a level of water scarcity. In Brazil, a succession of crises in water distribution has been taking place in the last few years, partly due to the ever shorter periods of rain; in São Paulo for example, the last summer was the driest of the last 15 years, which left the larger water reservoirs merely at 39.6% of capacity by last August. The situation in Cape Town, South Africa, is a clear reflexion of the truly international dimension of this issue. Long periods of drought combined with excessive consumption have brought the announcement of the dreadful Day Zero: the day when the availability of water for private consumption ends, and the taps close (this day was initially set for April 2018 and later postponed for 2019).  

Consistently, evidence shows that the extreme situation in Cape Town is mostly due to poor water management, both at the governmental and residential levels: if, on the one hand, it is undeniable nowadays that the climate is changing, it also has become clearer that it is necessary “to develop water-management tools that decision-makers and the public can understand and use.”

A Behavioral Issue

In an interview with the Portuguese news, the environmental engineer Pedro Teiga stated that the current level of water use is quite problematic and that difficult times may be near, should its use remain similar to the past year’s at the domestic, industrial and agricultural level,. This means that while water scarcity may be a multidisciplinary issue, there is clearly a behavioral component to consider—the individual water consumption, especially at a residential level. And here, both Psychology and Behavioral Economics may lend a helping hand.

Research in these fields has shown that, despite its complexity, it is possible to describe, predict and change human behavior when we understand what motivates it. We know, for example, that the tendency to behave in a certain way is directly influenced both by internal factors, such as the perception of control one has over the behavior and one's attitudes towards it, and by external factors, such as what we perceive as being the social norm associated with that behavior (that is, what most people do).

A Space Between Attitudes and Behaviors

study conducted by the Institute of Marketing Research and ordered by Águas de Portugal (a Portuguese water management company) in 2018 shows a clear dissonance between the attitudes and behaviors of the Portuguese people towards water. On the one hand, people recognize that there is an excessive use of water, but on the other hand they admit to not having saving habits and recognize that they only care when there are shortages of water.

If people understand the underlying problem and its dimension, why do they not act in accordance with that attitude? This disparity in known as intention-behavior gap, and it happens because our behavior is also influenced by other factors besides intentions and attitudes.

We may have all the best intentions, but acting according to our best interests is not always easy. In terms of water consumption, it is cognitively demanding to track the time we leave our taps running at home, or to resist the temptation to stay 5 more minutes under a hot shower.

Keeping Up With the Joneses

There is a force of motivation that must not be ignored if behavioral change is what we seek. It is a common truism to state that people are social animals, but the truth is that there are not many motivations as strong as the need to be aligned with the behaviors of the ones we perceive as being similar to us. Specifically, to see our water consumption compared with the water usage of our neighbourhood has been demonstrated to be an effective tool in reducing it, particularly in people that consume more than average.

Ferraro and Price tested this effect through an intervention based on the use of social comparisons and norms in the water monthly bills of residences in Georgia, USA. This intervention cost a maximum of €0.84 per residence, but resulted in a reduction of consumed water between 3,747 and 6,586 liters. Even though this study took place only during the summer of 2007, a follow-up showed that its effects were still visible 4 years after it had ended, which results in a cost/benefit relation of €0.20 per 3,785.41 liters of water saved. Another study, carried out in 2014 by the OECD, the World Bank and the behaviour design lab Ideas42, in which social comparisons were once more used, concluded that they are more effective when the reference is the neighborhood's average rather than the city’s average.

Further evidence of how our behavior is influenced by external factors such as social norms is that these are often more effective than the mere communication of information in producing behavioral change. Schultz and collaborators showed this in 2016 in a study that compared the effects of directly giving people helpful tips on how to save water to the effects of social comparisons. The results were clear: while simply giving people information resulted in no reduction on the consumption of residential water (the results were not statistically different from the control condition, where nothing was communicated to the participants), adding a comparison between the resident's consumption and the neighborhood's produced a 26% reduction in residential water use. 

A Behavioral Approach

The climatic changes caused by global warming allow us to predict that droughts will tend to be ever more severe. Thus, and apart from other measures, it is essential that people alter their daily behaviors and adopt a more responsible use of water. In order to achieve that, it is important to understand why excessive consumption happens, so we may change the context in which we live in such a way that eliminates obstacles and helps beneficial behaviors (to both the individuals and society) become more intuitive. For this reason, it is crucial to consider the psychological processes behind decision-making and water consumption, so it may be possible to understand where to surgically intervene in order to obtain the best possible results. Behavioral interventions may be a fundamental tool to promote more sustainable and suitable behaviors regarding water consumption and waste.

Created by

Diogo Santos, MSc, CLOO Professional Internship


Ajzen, I. (1991). The theory of planned behavior. Organizational Behavior and Human Decision Processes, 50(2), 179-211.

Bernedo, M., Ferraro, P. J., & Price, M. (2014). The persistent impacts of norm-based messaging and their implications for water conservation. Journal of Consumer Policy, 37(3), 437-452.

Corral-Verdugo, V., Bechtel, R. B., & Fraijo-Sing, B. (2003). Environmental beliefs and water conservation: An empirical study. Journal of Environmental Psychology, 23(3), 247-257.

Datta, S., Miranda, J. J., Zoratto, L., Calvo-González, O., Darling, M., & Lorenzana, K. (2015). A behavioral approach to water conservation: evidence from Costa Rica. The World Bank.

Ferraro, P. J., & Price, M. K. (2013). Using nonpecuniary strategies to influence behavior: evidence from a large-scale field experiment. Review of Economics and Statistics, 95(1), 64-73.

Fishbein, M., & Ajzen, I. (1975). Belief, attitude, intention and behavior: An Introduction to theory and research. Reading, MA: Addison-Wesley.

Hardin G. (1968). The tragedy of the commons. Science, 162, 1243-1248

Schultz, P. W., Messina, A., Tronu, G., Limas, E. F., Gupta, R., & Estrada, M. (2016). Personalized normative feedback and the moderating role of personal norms: A field experiment to reduce residential water consumption. Environment and Behavior, 48(5), 686-710.

Van Vugt, M. (2001). Community identification moderating the impact of financial incentives in a natural social dilemma: Water conservation. Personality and Social Psychology Bulletin, 27(11), 1440-1449.

Van Vugt, M. (2009). Averting the tragedy of the commons: Using social psychological science to protect the environment. Current Directions in Psychological Science, 18(3), 169-173.