UC Riverside

Rebate programs are often used in the residential water sector to alleviate market failures that may hamper the adoption of water-efficient technologies. In this paper, we examine whether several rebate programs stimulate or crowd out private investment in indoor and outdoor technologies. To do so, we use a panel of household-level data from a water district in Southern California for the period 2014–2015. Our results indicate that, while all the rebate programs considered in the analysis increase private investment in water-efficient technologies, only outdoor rebate programs generate further private investment in other outdoor technologies.