Investigating the effects of advertising and forcing frugal behavior on water consumption with regard to social interactions of consumers

Introduction: In order to achieve sustainable development, it is necessary to actively manage the increasing consumption of water resources. In this regard, from the economic point of view, possible policies for water crisis management are presented in the form of increasing the supply and controlling the demand. For Iran, policy-makers have focused more on the supply side and the production of water and less on the demand management.
This study attempts to design a model for the behavioral characteristics of residential water consumers in terms of their social interactions (i.e., the effect of social networks on the consumption behavior) and to simulate the actual water demand in Shiraz City.
Theoretical framework
Description of the base model: Two types of consumption behaviors, cooperative (C) or non-cooperative (NC), have been considered for residential water consumers. Using the individual's social environment, economic and climatic variables (such as temperature) and the diffusion process model, the tendency to one of these two behaviors is determined. There is an optimal social consumption for each household according to its social environment. Depending on the type of the behavior and the optimal consumption, the household adjusts its demand in the next period. To determine the agent’s water consumption behavior according to the corresponding social network, the following utility functions are formulated:
 





(1)

 



(2)

 



(3)

 



(4)

 



(5)

 




 
These equations illustrate the utility of maintaining or changing household’s behavior. In these equations, a, b, are the parameters of the model.  and  are the proportion of neighbors of agent i with the behavior of C and NC, respectively, indicating the effect of a neighbors’ behavior on the behavior of an agent. The first right-hand part of the above equations represents the social pressure. The modification factor ( ) is the effect of the other factors on the household’s choice of behavior and measures the pressure to have behavior C.
Optimal water consumption affected by social network: When there are V neighbors, the optimal consumption is obtained by solving the following minimization problem:
 





(6)

 



 


  




: Neighbor’s water consumption per capita
 


: Household’s income


: Neighbor’s income
: Weight coefficient.


 



 
 
 
 
 




 
Household’s water consumption adjustment: The model assumes that agents compensate for a percentage of the gap between their consumption and their optimal water consumption in each period, according to the utility that they obtain from their social network.
This study is based on the data from 1000 household water users in the residential areas of Shiraz. In each residential cell of 300 × 300 square meters in the city, a household is selected to represent all the consumers in that geography. The present study minimizes the root mean square error (RMSE) between two sets of simulation data and real data, as a criterion for calibration. The data from 2005 to 2016 are used for the calibration process, and the data from 2017 to 2019 are used to validate the model.
Results and Discussion
Advertisement scenarios: Simulated advertising scenarios show 10, 20, and 30 percent of increase in advertising expenditures to encourage consumers to behave cooperatively. In 2032, the rate of reduction in per capita consumption, compared to 2019 and according to each scenario, will be 400, 950 and 1270 liters, respectively. The difference from the baseline scenario is more than these values. Also, the percentage of the people with cooperative behavior in the system will improve and reach 61, 73 and 81%, respectively.
Scenarios of coercive behavior: The coercion scenario includes situations in which the government can, by legal or technical requirements, force households with per capita consumption more than 54 or 55 cubic meters, or only non-cooperative households with the consumption more than 54 or 55 cubic meters, to cooperate.
In these scenarios, the order of the best results obtained to reduce consumption is as follows:
A- Forcing consumers with non-cooperative behaviour and consumption above 54 cubic meters
B- Forcing consumers with consumption above 54 cubic meters
C- Forcing consumers with non-cooperative behaviour and consumption above 55 cubic meters
D- Forcing consumers with consumption above 55 cubic meters
Conclusion: The results show that an increase in advertisement can improve the percentage of people with cooperative behavior to reduce consumption. Also, in the case of forcing consumers to adopt saving behavior, it is not necessary to force all the consumers (above a certain threshold of consumption), but it is better to force only those with non-cooperative behavior (and with consumption above a certain threshold). Following the behavior of a neighborhood network will distribute the cooperative behavior throughout the system and, therefore, cause proper saving in the total water consumption.