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On September 8, Scott Sumner posted about how Californians lower electrical energy utilization in response to a request from California’s Workplace of Emergency Companies. I commented that I believed this was great.
In response, my former Hoover colleague Alvin Rabushka despatched the next electronic mail to Scott and me:
Gents,
I moved into my Stanford Campus Residence on July 3, 1976 (nonetheless there). At the moment, there have been 604 single household residences and 82 small condos constructed for retirees on campus.
Properties weren’t metered. Householders paid a month-to-month water payment with no restrictions on consumption. Householders with swimming pools sometimes drained and refilled them yearly.
1975-76 was a dry yr. The drought continued into the next yr. Stanford’s water reserves from the Hetch Hetchy Reservoir have been falling dangerously low.
In autumn 1976, Stanford requested all householders to scale back their water consumption, advising these with swimming pools to not drain and refill them.
What occurred? Water consumption fell 50% over the following tutorial yr. Month-to-month water prices remained unchanged.
The rains return in 1977/78. Additionally, Stanford put in water meters and charged for quantity consumed.
I recall discussing this decreased consumption with Sam Peltzman, Sherwin Rosen, and different visiting economists at Hoover that yr and the following. They have been surprised that such a big discount in consumption befell with no improve in worth.
Alvin
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