Subsidies for Succulents: Evaluating the Las Vegas Cash-for-Grass Rebate Program

Abstract

I estimate the water savings, energy use externalities, and property value effects of a Las Vegas area water conservation program that subsidizes conversions of lawn to desert landscape. Using event studies and panel fixed-effects models, I find that the average conversion reduces water use by 19%–21%, may increase energy use by 3%, and increases property values by about 1%. In addition, my results demonstrate that there is little erosion in water savings, that water savings are inversely proportional to annual program take-up, that participants with high preconversion water demand save the most water, and that a 4% price increase would have achieved equivalent sav-ings. I find little evidence of property value spillovers to neighboring properties. The program saves water at an annual rate of $2.65/kgal to $3.31/kgal and generates net benefits of between $2.35 and $2.88 per square foot of desert landscape converted.