Does Water Scarcity Lead to Overuse? Evidence from Field Experiments

Abstract

"The increased variability in rainfall patterns due to external shocks such as climate change can lead to different adaptive actions by socio-economic agents. This paper presents the results from an economic field experiment aiming to explore the responses of rural water users in Colombia to exogenous changes in the availability of water resources. Subjects participated in a within-subjects common pool resources experiment with different levels of the resource along the game. In the first stage of the experiment all subjects played in a baseline with a high level of the resource. In the second and third stage the experimentalists exogenously changed the resource available from the baseline treatment. Our results suggest that users extract more when the level of the resource is low enough for them to fully deplete it."