In a global context of increasing water scarcity, reducing water use in the agricultural sector is one of the spearheads of sustainable agricultural and environmental policies. New technologies such as smart water meters are promising tools for addressing this issue, but their voluntary adoption by farmers has been limited. Conducting a discrete choice experiment with randomized treatments, we test two policy instruments designed to foster the voluntary adoption of smart water meters: a conditional subsidy and green nudges. The conditional subsidy is offered to farmers who adopt a smart meter only if the rate of adoption in their geographic area is sufficiently high (25%, 50% or 75%). In addition, we implement informational nudges by providing farmers specific messages regarding water scarcity and water management. With the responses of 1,272 French farmers, we show that both policy instruments are effective tools for fostering smart water meter adoption. Surprisingly, our results show that the willingness to pay for the conditional subsidy does not depend on the collective adoption threshold. We also demonstrate that farmers who receive an informational nudge are more likely to opt for a smart water meter. This result calls for a careful joint design of these two policy instruments..
Nudging and Subsidizing Farmers to Foster Smart Water Meter Adoption
6 October 2020