Beyond Pricing: A Behavioural Path to Water Security
Pricing alone will not solve the water crisis. Evidence from Bengaluru shows that lasting conservation comes from reshaping habits and norms – nudges that work with, not against, economic incentives.
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Vivek, Independent Researcher
Tapan Kar, IFMR Graduate School of Business, Krea University
Sesha Meka, IFMR Graduate School of Business, Krea University
Deepak Malghan, IIM Bangalore, Stockholm Environment Institute
SDG 6: Clean Water and Sanitation | SDG 11: Sustainable Cities and Communities
Institutions: Ministry of Jal Shakti
India supplies 18 percent of the world’s population but possesses just 4 percent of its water resources, making it one of the most water-stressed countries globally. According to government data, national reservoir levels had dropped to just 40 percent of capacity by March 2024, with Karnataka’s main reservoir - critical for Bengaluru’s supply - plummeting to a mere 16 percent.
Even so, many Bengaluru households secured steady supply through borewells or tankers, while the city’s reservoirs ran low and others struggled to receive water. This contrast between private abundance and collective scarcity captures a paradox at the heart of urban water policy in the Global South.
How should water be priced? And can tariffs alone ever be a sufficient policy instrument? These questions cut deep because water is not just an economic good, but also a political and behavioural one.
A three-year study in Bengaluru suggests that tariffs on their own deliver only modest savings, and sometimes even encourage counter-productive responses. By contrast, simple behavioural nudges, such as giving households personalised feedback on their usage and comparing them with a standard level of water need – cut consumption by almost a third, four times the savings achieved through price alone.
Not that tariffs should be abandoned – prices matter, but they are not enough. Water policy needs to move beyond cost signals and work with human behaviour if it is to secure sustainable use.
The Limits of Price
In theory, volumetric pricing where households pay for each additional unit of water should reduce demand. But the Bengaluru experiment revealed a more complex reality. Among 120 affluent households, tariffs linked to quarterly bills reduced consumption by an average of about 8 percent. Yet more than one in five households – 21 percent – actually increased their use, while just 12 percent accounted for the entire net reduction.
The effect was also fleeting. Usage dipped right after bills arrived but quickly rebounded, a “bill-to-pay” cycle showing that quarterly charges are too blunt to anchor new habits.
Even if economics worked more predictably, politics remains difficult. Water is widely seen as a basic entitlement, and tariff hikes often meet resistance where incomes are uncertain and trust in utilities is weak. In many Indian cities, rates have been frozen for decades. Without a guaranteed lifeline supply for basic needs, tariff reforms can end up hitting the poorest hardest, deepening inequality rather than curbing waste. This is because a wealthy household might not mind paying more for filling swimming pools or watering lawns. But a poor household already struggling to pay for essential use could end up cutting back on costly potable-quality water or sanitation if prices rise across the board.
Pricing nevertheless remains important: it can deter extreme waste and signal scarcity. But it rarely delivers lasting conservation by itself.
Nudges that Last
The same households responded very differently to a behavioural approach. Before tariffs were introduced, families received weekly “habit-change reports” that offered personalised feedback, comparisons with a needs-based standard for water use, and practical tips. This modest intervention cut water use by about 33 percent. The reductions persisted beyond a five-week period and were still visible 15 months later.
Why was this nudge so powerful? Feedback built capability by making hidden consumption patterns visible and actionable. Comparisons opened opportunity by showing that savings were possible. Motivation drew on intrinsic drivers such as environmental concern or the desire to meet goals. Unlike tariffs, nudges reinforced agency.
The order mattered too. Because feedback came first, households had already built awareness and habits. When tariffs came later, households were less likely to fall into the counter-intuitive habit of consuming more once they saw a price tag. Nudges made pricing more effective.
Who Responds, And How
This Bengaluru experiment also shows that not all households behave alike. Families with weak conservation routines, such as leaving taps running, showed the sharpest reductions when nudged. Households that professed strong environmental values were paradoxically heavier users of water, but once shown their actual consumption, they cut back sharply -- narrowing the familiar gap between what people say and what they do. Tenants, who usually cannot invest in new appliances or plumbing, reduced use by more than 30 percent under nudges. Owners were somewhat more responsive to tariffs. The heaviest consumers – those with the highest baseline use – were the most likely to cut back under both interventions.
This variation makes clear that a one-size-fits-all strategy will not work. Tailoring interventions to different household profiles can make conservation far more effective.
From Gated Homes to City Streets
The Bengaluru experiment was conducted in an affluent gated community, but the lessons are applicable far beyond. Progress towards SDG6 depends on reaching informal settlements and peri-urban areas where billing is irregular and meters scarce. In such settings, price reforms are politically fraught. Behavioural interventions, by contrast, impose no financial burden and can be delivered through low-cost channels such as SMS, WhatsApp or community meetings.
From an equity standpoint, this matters too. Tariffs alone risk excluding the poor or pushing them into hardship. Nudges give households information and agency and can foster cooperation without confrontation.
Behavioural interventions are not quick fixes, but when designed carefully they are scalable, cost-effective and politically feasible.
From Scarcity to Stewardship
The most notable finding is that pricing and behavioural tools work best in combination. Households exposed to both were less likely to increase consumption when tariffs rose. Nudges softened the risk of perverse responses, allowing tariffs to reinforce rather than undermine conservation.
For policymakers, this is encouraging. In Bengaluru, families used a third less water simply by receiving timely, personalised feedback. Multiplied across millions of households, such small shifts could transform the trajectory of water management.
This is the real frontier for policy – and the most hopeful path to a sustainable, equitable water future.
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The discussion in this article is based on authors’ research published in Environmental Research Letters (Volume 19). Views are personal.