Vol.:(0123456789) Environmental Economics and Policy Studies https://doi.org/10.1007/s10018-020-00286-3 1 3 RESEARCH ARTICLE Promotion of residential water conservation measures in South Africa: the role of water‑saving equipment Djiby Racine Thiam 1  · Ariel Dinar 2  · Hebert Ntuli 1 Received: 21 March 2020 / Accepted: 12 September 2020 © Society for Environmental Economics and Policy Studies and Springer Japan KK, part of Springer Nature 2020 Abstract In many urban settings around the world the severity of water scarcity has induced changes in household behavior, leading to reduction in the volume of water demanded. One of the most widely used strategies is the adoption of water-saving equipment that collects, stores and eventually treats wastewater from various sources within the household. This paper investigates the factors that drive adoption of water-saving equipment in Cape Town, South Africa, following the catastrophic “Day Zero” water crisis in 2018. First, the paper develops a disaggregated technol- ogy difusion model. Second, we make use of choice experiments to determine the attribute levels and socioeconomic characteristics that infuence adoption of water- saving equipment in urban communities in South Africa. Data collected from a sam- ple of 465 representative households in Cape Town are used in a choice modelling framework. Latent class analysis (LCA) is compared with both multinomial logit and conditional logit models to estimate marginal willingness to pay (MWTP) for adop- tion of water-saving equipment. The LCA identifed three household classes with distinct preferences, suggesting divergence in adoption of water-saving equipment. Keywords Greywater technology difusion · Choice experiment · Latent class analysis · Water scarcity · Cape town · South africa JEL Classifcation O33 · Q 25 · Q 55 · Q 58 · D04 * Djiby Racine Thiam djiby.thiam@uct.ac.za 1 School of Economics, University of Cape Town, Rondebosch, South Africa 2 School of Public Policy, University of California, Riverside, USA