Abstract
This study evaluates whether financial penalties have non-price effects separate from any punishment avoidance behavior. I investigate the effects of a restriction termed ‘mandatory rationing’ on residential water consumers who face differential exposure to the content of the policy. I find a significant response among households who were likely to be fined, but also among households with low likelihood of facing penalties. I provide evidence that this occurs because the policy directly affected consumption through non-price channels. My findings show that fine-based policies can have impacts beyond the targeted population as a result.
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