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Abstract
Notwithstanding the neoclassical predilection for markets as a means of allocating scarce
resources, it remains the case that state-devised attenuation of behaviour is the norm for
many resource allocation decisions. This is particularly apparent in the case of water in
urban areas in Australia, where mandated water restrictions limit the forms of water use
that are permissible. Whilst there has been much debate about the efficacy of this
approach, an important underlying question relates to the motivations for individuals to
comply. More specifically, if a restriction regime is broadly in line with underlying
motivations then, prima facie, it will generate less severe welfare losses than one which is
largely at odds with individual drivers of behaviour.