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Pro-environmental incentives and loss aversion: A field experiment on electricity saving behavior

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  • Ghesla, Claus
  • Grieder, Manuel
  • Schmitz, Jan
  • Stadelmann, Marcel

Abstract

This paper reports evidence from a field experiment investigating households’ electricity saving behavior. We motivated households’ efforts to save electricity via pro-environmental incentives that did not affect people’s monetary utility but targeted their environmental preferences. The results show that such pro-environmental incentives can be effective, especially when framed as potential losses to the environment. Our loss-framed pro-environmental incentive led households to save 5% on their monthly electricity consumption compared to a control group.

Suggested Citation

  • Ghesla, Claus & Grieder, Manuel & Schmitz, Jan & Stadelmann, Marcel, 2020. "Pro-environmental incentives and loss aversion: A field experiment on electricity saving behavior," Energy Policy, Elsevier, vol. 137(C).
    • Handle: RePEc:eee:enepol:v:137:y:2020:i:c:s0301421519307177
    DOI: 10.1016/j.enpol.2019.111131
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    2. Buckley, P. & Roussillon, B. & Teyssier, S., 2021. "Gain and loss framing to encourage effort provision: An experiment," Working Papers 2021-02, Grenoble Applied Economics Laboratory (GAEL).
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    4. Pratik Mochi & Kartik Pandya & Joao Soares & Zita Vale, 2023. "Optimizing Power Exchange Cost Considering Behavioral Intervention in Local Energy Community," Mathematics, MDPI, vol. 11(10), pages 1-15, May.
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    7. He, Shutong & Blasch, Julia & Robinson, Peter John & van Beukering, Pieter, 2024. "Social comparison feedback in decision-making context: Environmental externality levels and psychological traits matter," Ecological Economics, Elsevier, vol. 216(C).
    8. Leonhard K. Lades & Ewa Zawojska & Robert J. Johnston & Nick Hanley & Liam Delaney & Mikołaj Czajkowski, 2022. "Anomalies or Expected Behaviors? Understanding Stated Preferences and Welfare Implications in Light of Contemporary Behavioral Theory," Working Papers 2022-20, Faculty of Economic Sciences, University of Warsaw.
    9. Lingyun Mi & Jiali Han & Ting Xu & Xuejiao Wang & Lijie Qiao & Tianwen Jia & Xiaoli Gan, 2023. "Evaluating Whether and How Public Health Event Information Frameworks Promote Pro-Environmental Behavior," IJERPH, MDPI, vol. 20(4), pages 1-20, February.

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    More about this item

    Keywords

    Pro-environmental behavior; Ecological incentives; Loss aversion; Loss framing; Randomized field experiments; Energy conservation;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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