Change the world

22/09/2021

Behavioural economics is key to helping escape the Eastern Cape’s water crisis – understanding how people view water allows for the development of strategies that can help change these views, and then the behaviour, in a systematic way.

The Kromme Dam (old Churchhill Dam) in the Eastern Cape on March 07, 2017 in Kareedouw, South Africa. (Photo: Gallo Images / Die Burger / Werner Hills)

Behavioural economics is key to helping escape the Eastern Cape’s water crisis – understanding how people view water allows for the development of strategies that can help change these views, and then the behaviour, in a systematic way.

More than one billion people around the world already face water scarcity and, in addition to escaping Day Zero this September in the Eastern Cape, we desperately need a long-term solution.

As one of the largest institutions in the Nelson Mandela Bay Metro, Nelson Mandela University is part of the city-wide efforts to save water. However, we have seen in our metro that despite classic interventions such as intensive awareness campaigns and punitive tariffs, there has not been a significant decrease in water usage.

This is where behavioural economics comes into play.

In a nutshell, when it comes to the water crisis, behavioural economics is understanding and responding appropriately to human nature by devising interventions that can help to change how people see — and then use — water.

This is because economics theory tells us that how we present choices influences the actual choice people end up making.

We take for granted that making people aware of a problem and solution will translate into a desired action. Think about your own experience: does the fact that you know that you should be doing something — such as going to gym and exercising regularly — result in you actually doing it?

Our difficulty is that we think people are rational, but they are not always guided by reason. Students of economics need also to be students of psychology.

We need to look at choice architecture, which means carefully designing the environment so that it is easy to make the “right” choice.

That design may entail providing information timeously and in digestible bits, and providing comparison figures. In the context of water-saving, this may entail more frequent meter reading, and providing comparisons against the average consumption in your community.

The future for policymaking

Behavioural science is the future for policymaking and interventions. The World Bank and United Nations recognise its value, and many governments have behavioural science units for the same reason. It can help to shape policy not only in saving water but also in other key areas such as vaccination hesitancy, tax collection, or keeping our oceans clean. There are so many possibilities.

First of all, though, we need to understand the many reasons people do not make more effort to save water. For example, why should I save water if:

  • I can pay the bill;
  • I am not the person who pays the bill;
  • No one can check on me as we are many on the same meter;
  • I don’t see anyone else saving water;
  • We have a small household so we can use more; and/or
  • The municipality does not fix water leaks.

Once you understand how people view water, then you can bring in strategies to help change these views, and then the behaviour, in a systematic way.

In turn, the curriculum we present to our students needs to respond to such challenges, so at NMU we will be introducing modules such as Resource, Environmental and Ecological Economics.

Learn from others’ success

The beauty of behavioural economics is that we already have the information that can enable targeted interventions. It can work because municipalities, institutions and other managing authorities have access to “big data” which they can extract to devise relevant interventions.

They also can learn from success stories elsewhere:

In Bogota, Colombia, one campaign was successful by making reward and punishment schemes public. The message was seen in a variety of settings, and let consumers know exactly what they could do to make a difference. After the campaign, water-saving improved by 13.8%.

In Belen, Costa Rica, the municipality used social comparison by placing a sticker on residents’ water bills to show how their water-saving efforts matched those of others. A smiley-face sticker let the household know if its water consumption was lower than the average in their neighbourhood. Water usage dropped significantly.

In France, a simple feedback mechanism was useful: when householders used a shower meter it led to a water (and energy) saving of 23%.

Costa Rica’s sticker approach, for one, can work here, as can more timeous communication on leaks. For example, your municipality can communicate to a neighbourhood what it is doing to fix a gushing pipe in its street. It should share details such as the date and time the leak was reported as well as when the team went out and, even better, send a photograph showing workers on site.

Awards need not necessarily be monetary and it may work to reward water-saving stars by giving public recognition. In Cape Town, to give another example, an inter-schools competition to lower water usage bore fruit.

Be a good neighbour

Behavioural economics shows that comparing your household with your neighbours really does work.

Simple actions such as placing a brick in the cistern of a toilet also help to cut water usage, but not everyone does this. If you see this as a “low-status” action, then you may not want to save water in this way. However, if you know that everyone in your street is doing this and that by not doing so, you are threatening your and your neighbour’s future source water, you may reconsider.

Key observations have been that low water consumers responded more to goal setting and plan-making, and high water consumers responded more to neighbourhood social norms.

At NMU, we take the water crisis seriously and are on a water emergency and sustainability drive. This includes fast-tracking our own institutional water management and risk mitigation plans, and there is a host of other initiatives on all seven of our campuses.

The university is also part of a Water Emergency Management Team, which comprises water scientists and technical support staff, and they work closely with the Municipal Disaster Management Command Centre and the Business Chamber.

Better management of water involves getting groups of people to alter their behaviour to benefit others, which means it is important to be conscious of your actions. Together, we can make a difference. DM

This article appeared in the Daily Maverick's "Our Burning Planet Op-Ed" on 21 September 2021, written by Professor Syden Mishi, Associate Professor and acting head of the Department of Economics at Nelson Mandela University.

https://www.dailymaverick.co.za/article/2021-09-21-we-can-help-alleviate-the-eastern-capes-day-zero-water-crisis-by-applying-behavioural-economics/

Contact information
Professor Syden Mishi
Associate Professor and Acting Head of Department
Tel: 0415044607
Syden.Mishi@mandela.ac.za