Cost of California’s 2015 Drought Water Conservation Mandate
Mehdi Nemati, Steven Buck, and David Sunding
As a result of the 2015 drought mandate, we calculate the consumer welfare losses to be $203 million in Northern California and $794 million in Southern California under observed reductions. Many urban water agencies complained that the mandated targets were arbitrary and likely to be more costly than an optimal policy. We find support for this view. In particular, we calculate that an efficient mandate would have resulted in a savings of nearly $180 million for California households.
Urban Water, Rationing, Drought
Mehdi Nemati, Steven Buck, and David Sunding. 2018. "Cost of California’s 2015 Drought Water Conservation Mandate." ARE Update 21(4): 9-11. University of California Giannini Foundation of Agricultural Economics.