Do monetary and non-monetary incentives influence environmental attitudes and behavior? Evidence from an experimental analysis

Abstract There is a wide array of empirical work on the use of monetary and non-monetary measures to manage residential water consumption. However, there has been little focus on exploring the ability to change human attitudes and behavior through offering consumers sustainable resource management. This research helps bridge this gap, through an experimental trial in Brisbane, Australia. Choices of different monetary and non-monetary incentives for managing water demand are offered to survey participants. A structural behavioral model is then developed to identify direct and indirect impacts of attitudes and behavior and which can be compared between separate groups drawn from the survey’s participants. Our results suggest that both monetary and non-monetary incentives offered to households significantly reduce water consumption, which is especially so for those holding pro-environmental attitudes/behavior. Importantly, the impact is higher for non-monetary incentives. The results therefore provide valuable insight for the development of long-term sustainable resource management policies.