In-Kind Transfers in Environmental Crisis: Evidence from Cape Town, South Africa

Last registered on July 06, 2025
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Pre-Trial

Trial Information

General Information

Title
In-Kind Transfers in Environmental Crisis: Evidence from Cape Town, South Africa
RCT ID
AEARCTR-0015932
Initial registration date
May 01, 2025

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
May 06, 2025, 4:58 AM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Last updated
July 06, 2025, 12:55 PM EDT

Last updated is the most recent time when changes to the trial's registration were published.

Locations

Country
South Africa
Region
Cape Town

Primary Investigator

Name
Cassandra Cole
Affiliation
Harvard University
Contact Primary Investigator

Other Primary Investigator(s)

Additional Trial Information

Status
On going
Start date
2025-04-14
End date
2025-07-31
Keywords
Environment & Energy
Additional Keywords
Water
JEL code(s)
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
What role do in-kind transfers to low-income households play when environmental crises necessitate demand reductions for essential goods? In-kind transfers pose an equity-efficiency tradeoff, especially when the good being transferred poses an externality – as in the case of free water provision to the poor during extreme drought. During the “Day Zero” drought in 2017 and 2018, the City of Cape Town shielded low-income residents from increasing water prices by providing limited quantities of free and discounted water. Quasi-experimental analysis of city water billing records shows that these transfers substantially reduced water bills for low-income households and, contrary to existing evident showing that low-income households are generally more price elastic in their water demand, did not substantially increase their water consumption relative to comparable households who just barely did not receive the transfers. Drawing welfare conclusions on the effectiveness of the in-kind transfers requires understanding why low-income households in Cape Town are so price-inelastic in their water consumption. Households may be misinformed about water prices, so that in-kind transfers cannot generate the price signals necessary to shift water consumption; or, households may have invested in water-saving technologies and habits during the drought that make water conservation relatively inexpensive in the long run. In this project, a survey experiment delivering information interventions on water prices and the city’s water supply will attempt to disentangle these and other mechanisms in order to provide a full analysis of the welfare impacts of in-kind transfers during environmental crisis in the Cape Town context.
External Link(s)

Registration Citation

Citation
Cole, Cassandra. 2025. "In-Kind Transfers in Environmental Crisis: Evidence from Cape Town, South Africa." AEA RCT Registry. July 06. https://doi.org/10.1257/rct.15932-3.0
Sponsors & Partners
Experimental Details

Interventions

Intervention(s)
The intervention is conducted in conjunction with an in-person survey on water use and includes two nested treatment arms:

1. 50% of households will randomly receive information on their own water bill including how to read the water section of their municipal bill, their marginal price for water exclusive and inclusive of sanitation and taxes, and how to calculate the price of a marginal quantity of water from the information on their bill.

2. 25% of households, nested within the price treatment, will randomly receive information on the city's water supply: water currently stored in the city's major reservoirs as a percent of total capacity, comparisons to the levels in the reservoirs in the previous year and in 2018, how to access this information on the city's website, and the number of months' worth of water currently stored in the reservoirs.

50% of household are in the control group and will receive no information on their water price or the city's water supply, but will still take part in the in-person and follow-up phone surveys.
Intervention (Hidden)
Intervention Start Date
2025-04-14
Intervention End Date
2025-06-30

Primary Outcomes

Primary Outcomes (end points)
The key outcome variables are:
1. Incentivized posterior beliefs about water prices and the city's water supply.
2. Water use in the months following the intervention.
3. Willingness to pay for water-saving (high-efficiency tap attachments) and water use for leisure (an inflatable kiddie pool).
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Additional secondary outcomes:
1. Likert-scale beliefs regarding the importance of saving water in various circumstances.
2. Self-reported water-saving and water-using behavior.
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
Households will take part in one in-person survey and two follow-up phone surveys.

Households will be randomized into one of three groups (survey-only control (50%), price treatment (25%) and price treatment plus water supply treatment (25%). Randomization will be stratified based on four cells: households with/without indigent-qualifying property values during the 2017-2018 drought, and households with/without indigent-qualifying property values today.

The main treatment will take place in the initial in-person survey, with reminders of the treatment information delivered in the follow-up phone surveys.

Incentivized posterior beliefs will be collected by offering participants a 1-in-20 chance to win R20 if they estimate their marginal water price for 100L within 10% or R2, and a 1-in-20 chance to win R20 if they estimate the number of months of water currently in the reservoirs within 10% or 2 months.

Incentivized willingness to pay for water-saving and water-consuming will be collected using multiple price lists where participants choose between a raffle ticket for a set of high-efficiency tap attachments/a raffle ticket for an inflatable kiddie pool and a raffle ticket for a voucher with varying value.


Independent of the treatment randomization, households will also be randomized into groups (50% each) determining whether they are asked for posterior beliefs about the city's water supply, as even discussing the water supply may make conservation salient and influence household behavior in the control group.
Experimental Design Details
Randomization Method
Randomization is done in-office by a computer.
Randomization Unit
Randomization is done at the level of the individual household.
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
1000 households
Sample size: planned number of observations
1000 households
Sample size (or number of clusters) by treatment arms
500 households in control
250 households receive price treatment only
250 households receive price and water supply treatments
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
Harvard University Area IRB
IRB Approval Date
2025-03-06
IRB Approval Number
IRB24-1704
IRB Name
UCT Faculty of Commerce Research Ethics Committee
IRB Approval Date
2025-03-19
IRB Approval Number
COM/01493/2025
Analysis Plan

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Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
No
Data Collection Complete
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials