Principles, Prices and Places: Residential Water Use in

Kelowna, British Columbia

John JanmaatDepartment of Economics

University of British Columbia – Okanagan Campus

Outline

• The Okanagan Valley• Principles• Prices• Places• Conclusion

The Okanagan Valley

• In the Southern Interior of British Columbia.• Semi-arid climate

– Dry (280 – 450mm precipitation per year)– Short, relatively mild winter.– Hot summer.

• “Napa Valley North”– Tourist destination– Retirement destination

Location

Oroville to Enderby Google Earth tour

Okanagan Valley

Annapolis Valley

Climate

• The Okanagan is a North – South valley in the interior plateau of BC.– Coast and Cascade

mountains createrain shadow.

– Lack of relief on plateau makes waterstorage expensiveto build.

Yarmouth

GreenwoodTru

ro

New Glasgo

w

Sydney

Halifax

0

400

800

1200

1600

Total Precipitation

Vanco

uver

Prince

Rupert

Prince

George

Kamloops

Dawso

n Creek

Kelowna

GoldenTofino

0500

100015002000250030003500

Total Precipitation

Unique Habitat

• Many species found nowhere else in Canada– 172 red listed species.

• Among highest concentration in Canada.

• Extreme development pressures.– Immigration into Valley– Demand for single family homes near lake

• Most desirable development properties also harbor unique habitat.

Principles

• Moral Suasion– Persuade people to ‘do the right thing’

• Examples– Okanagan Waterwise

• Supported by Okanagan Basin Water Board

– Mail, newspaper, television, radio, internet, etc. programs to inform / convert residents.

– Education material provided for schools• OBWB and NRCan, Waterscapes Poster

Education

• Combine information with an appeal to ‘do the right thing.’

Kelowna Residential Survey

• Telephone, internet and mail survey.– Initially telephone, with internet alternative.– Finally, mail, with internet alternative

• Stratified random sample.– Coverage of different water providers.

• 741 numbers called 1532 letters sent– No answer, etc. from phone part of mailing.– 516 returns, 490 complete.

Conservation Behaviors

• Indoor Investments– Low flow shower heads, etc.

• Outdoor investments– Timed irrigation, arid climate plantings, etc.

• Behaviors– Turn off tap when brushing teeth, etc.

Indoor Investments

Don't know

Greywater reuse

Water cons. DW

Water cons. WM

Flow flow toilets

Low flow shower

Tap aerators

0 50 100 150 200 250 300 350

Outdoor Investments

Don't know

Other

Soil additive

Greywater yard

Pool cover

Rain capture

Timed irrig.

Moisture probe irrig.

Drought grass

Reduce water

Xeriscape

Paver/gravel

0 50 100 150 200 250 300 350

Behaviors

Laundry when full

DW when full

Flush when necc.

Turn of shower

Turn off tap

Use basin

Scrape dishes

0 100 200 300 400

Total Conservation Actions

Conservation Actions

Conservation Actions

Fre

qu

en

cy

0 5 10 15 20

02

04

06

08

01

00

12

0

Principles

• Use of moral suasion common• Does it work?• Measurement

– Assorted ad-hoc measurement instruments– ‘Standard’, New Ecological Paradigm

New Ecological Paradigm

1. We are approaching the limit of the number of people the earth can support.

2. Humans have the right to modify the natural environment to suit their needs.

3. When humans interfere with nature, it often produces disastrous consequences.

4. Human ingenuity will insure that we do not make the earth unlivable.

5. Humans are severely abusing the earth.6. The earth has plenty of natural resources if we just learn how

to develop them.7. Plants and animals have as much right as humans to exist.

New Ecological Paradigm

8. The balance of nature is strong enough to cope with the impacts of modern industrial nations.

9. Despite our special abilities, humans are still subject to the laws of nature.

10. The so-called "ecological crisis" facing humankind has been greatly exaggerated.

11. The earth is like a spaceship with very limited room and resources.12. Humans were meant to rule over the rest of nature.13. The balance of nature is very delicate and easily upset.14. Humans will eventually learn enough about how nature works to

be able to control it.15. If things continue on their present course, we will soon experience

a major environmental catastrophe.

New Ecological ParadigmNew Ecological Paradigm

sem3fac

Fre

qu

en

cy

10 20 30 40 50 60 70

02

04

06

08

01

00

12

01

40

NEP and Conservation

20 40 60 80

05

10

15

Conservation Actions by NEP

New Ecological Paradigm

To

tal C

on

serv

atio

n A

ctio

ns

C = 9.85 – 0.016NEP, R2 = 0.003

Knowledge

Knowledge

Grade

Fre

qu

en

cy

0.0 0.2 0.4 0.6 0.8

05

01

00

15

0

Knowledge and Conservation

0.0 0.2 0.4 0.6 0.8

05

10

15

Conservation Actions by NEP

Grade

To

tal C

on

serv

atio

n A

ctio

ns

C = 8.87 + 1.45KNOW, R2 = 0.007

Principles - Summary

• Almost no relationship between knowledge about Okanagan and water conservation.

• Almost no relationship between environmental values and water conservation.– Sign even wrong!

• What is causing water conservation?– Price?

Price

• Basic Economic Theory– Marginal willingness to pay for a good decreasing

in price.– Downward sloping demand curves.

• Measurement– Cross sectional data, no variation in price.

• Surveys at about same time.• Need price variation across space.

Kelowna Water Suppliers

• Five water providers– Three irrigation district

that supply residential.• Charge by connection.• MC zero for users.

– Two urban water systems.

• Charge increasing block

• Spatial price diff.

Differences Between Providers

• 1-6, Conservation counts. 7, Information sources

– NO SIGNIFICANT DIFFERENCE!!!

Var N Mean Test Pr(>crit) BMID CITY GEID OTHER RWW SEKID1 516 2.554 2.670 0.751 2.754 2.624 2.440 2.250 2.429 2.6582 516 6.783 0.760 0.579 7.508 6.924 6.533 6.125 6.200 7.0003 516 2.552 1.670 0.893 2.523 2.591 2.507 2.688 2.486 2.7954 516 5.380 0.470 0.798 5.308 5.401 5.293 5.938 5.171 6.0555 516 4.043 3.080 0.687 4.292 4.021 4.013 3.875 3.714 4.2886 516 4.667 1.160 0.329 4.985 4.620 4.693 4.562 4.200 4.9457 516 3.938 0.160 0.978 4.092 3.979 3.800 3.812 4.029 4.068

Price - Summary

• No variation in reported conservation behavior between water providers.– Inconsistent with expected price impact.

Principles vs Price

• Neither Knowledge, Environmental Attitude, or Price seem to explain variation in reported conservation.

• Does anything explain behavior?

Information Sources

Information Sources

Count of Information Sources

Fre

qu

en

cy

0 2 4 6 8 10 12

02

04

06

08

01

00

Information Sources

C = 7.19 + 0.50MSG, R2 = 0.114

0 2 4 6 8 10 12

05

10

15

Conservation Actions by Messages

Reported Information Sources

To

tal C

on

serv

atio

n A

ctio

ns

Multiple Regression Results

• Combined and interaction effects.– Outdoor investments explained best (>10%)– Indoor investment: messages, pro-environmental

values and income.– Outdoor investment: messages and income.– Actions: messages, water conservation values,

weakly education.– Knowledge about Okanagan and belief Okanagan

facing crisis never important!

Principles vs Price

• Environmental attitudes have at best a minor influence.

• No evidence for a price influence.– But income does help explain investments.– Price too low?

• Main effect from repetition of messages.– Household water use habitual, save water by

changing habituation?

Place

• In real estate, Location, Location, Location.• In water use?

– Many aspects of residential property likely to affect water use.

• Lot size – more yard to irrigate• House size – more people using water• Age – older, more water using fixtures• Assessed value (income proxy) – earn more, use more

– Anything left over?

Water Use Data

• City of Kelowna monthly water data– Bit of gymnastics to acquire.

• BC Assessment property information– Augment with housing characteristics

• City of Kelowna GIS property boundary and elevation data– Lot area, elevation, aspect, etc.

Monthly Water Use

Spatial Water Use

Spatial Analysis

• Why is there a spatial pattern?• An artifact?

– Large lots close together?– Older homes close together?– Larger homes close together?– Higher income people living close together?

• Can these effects be eliminated, to isolate any remaining effect of proximity?

Spatial Regression

• Value at A impacted by value at B, D, E.

• Value at E impacted by value at A, B, C, D, F, G, H, I.

• Spatial Lag, Value at E directly related to value at other locs.

• Spatial Error, Unexplained value at E related to unexplained value at other locs.

A B CD E FG H I

Spatial Regression

• Math gets a bit complicated.• Much computer power required.• Following slides from conference

presentation.– One economist showing off to others.

Spatial Analysis

• Strong support for spatial patterns for summer water use in Kelowna.

• Spatial effect not explained.– Behavioral – people do what their neighbours do?– Artificial – building regulations, soil types, etc.

actually responsible.• SR vs LR choices.

• If spatial effect ‘real’, can be used.

Conclusion

• For Kelowna:– Environmental values not closely related to water

use.– Price differences have little impact.– Multiple messages seem to influence behavior.– People seem to do what their neighbours do.