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Harnessing Policy Complementarities to Conserve Energy: Evidence from a Natural Field Experiment

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Listed:
  • John A. List
  • Robert D. Metcalfe
  • Michael K. Price
  • Florian Rundhammer

Abstract

The literature has shown the power of social norms to promote residential energy conservation, particularly among high usage users. This study uses a natural field experiment with nearly 200,000 US households to explore whether a financial rewards program can complement such approaches. We observe strong impacts of the program, particularly amongst low-usage and lowvariance households, customers who typically are less responsive to normative messaging. Our data thus suggest important policy complementarities between behavioral and financial incentives: whereas non-pecuniary interventions disproportionately affect intense users, financial incentives are able to substantially affect the low-user, sticky households.

Suggested Citation

  • John A. List & Robert D. Metcalfe & Michael K. Price & Florian Rundhammer, 2017. "Harnessing Policy Complementarities to Conserve Energy: Evidence from a Natural Field Experiment," Experimental Economics Center Working Paper Series 2017-05, Experimental Economics Center, Andrew Young School of Policy Studies, Georgia State University.
    • Handle: RePEc:exc:wpaper:2017-05
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    Cited by:

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    3. Manuel Hoffmann & Roberto Mosquera & Adrian Chadi, 2019. "Vaccines at Work," TWI Research Paper Series 116, Thurgauer Wirtschaftsinstitut, Universität Konstanz.
    4. Brent, Daniel & Wichman, Casey, 2022. "Do Behavioral Nudges Interact with Prevailing Economic Incentives? Pairing Experimental and Quasi-Experimental Evidence from Water Consumption," RFF Working Paper Series 22-02, Resources for the Future.
    5. Bhanot, Syon P., 2021. "Isolating the effect of injunctive norms on conservation behavior: New evidence from a field experiment in California," Organizational Behavior and Human Decision Processes, Elsevier, vol. 163(C), pages 30-42.
    6. Céline Nauges & Dale Whittington, 2019. "Social Norms Information Treatments in the Municipal Water Supply Sector: Some New Insights on Benefits and Costs," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 5(03), pages 1-40, July.
    7. Cattaneo, Cristina & D’Adda, Giovanna & Tavoni, Massimo & Bonan, Jacopo, 2019. "Can We Make Social Information Programs More Effective? The Role of Identity and Values," RFF Working Paper Series 19-21, Resources for the Future.
    8. Matilde Giaccherini & David Herberich & David Jimenez-Gomez & John List & Giovanni Ponti & Michael Price, 2020. "Are Economics and Psychology Complements in Household Technology Diffusion? Evidence from a Natural Field Experiment," Natural Field Experiments 00713, The Field Experiments Website.
    9. Drews, Stefan & Exadaktylos, Filippos & van den Bergh, Jeroen C.J.M., 2020. "Assessing synergy of incentives and nudges in the energy policy mix," Energy Policy, Elsevier, vol. 144(C).
    10. Loureiro, Maria & Labandeira, Xavier, 2019. "Exploring Energy Use in Retail Stores: A Field Experiment," Energy Economics, Elsevier, vol. 84(S1).
    11. Spandagos, Constantine & Baark, Erik & Ng, Tze Ling & Yarime, Masaru, 2021. "Social influence and economic intervention policies to save energy at home: Critical questions for the new decade and evidence from air-condition use," Renewable and Sustainable Energy Reviews, Elsevier, vol. 143(C).
    12. Iztok Podbregar & Sanja Filipović & Mirjana Radovanović & Olga Mirković Isaeva & Polona Šprajc, 2021. "Electricity Prices and Consumer Behavior, Case Study Serbia—Randomized Control Trials Method," Energies, MDPI, vol. 14(3), pages 1-12, January.
    13. Robert Hahn & Robert Metcalfe & Florian Rundhammer, 2020. "Promoting customer engagement: A new trend in utility regulation," Regulation & Governance, John Wiley & Sons, vol. 14(1), pages 121-149, January.
    14. Jessoe, Katrina & Lade, Gabriel E. & Loge, Frank & Spang, Edward, 2021. "Residential water conservation during drought: Experimental evidence from three behavioral interventions," Journal of Environmental Economics and Management, Elsevier, vol. 110(C).
    15. Fanghella, Valeria & Ploner, Matteo & Tavoni, Massimo, 2021. "Energy saving in a simulated environment: An online experiment of the interplay between nudges and financial incentives," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 93(C).
    16. Fang, Ximeng & Goette, Lorenz & Rockenbach, Bettina & Sutter, Matthias & Tiefenbeck, Verena & Schoeb, Samuel & Staake, Thorsten, 2023. "Complementarities in behavioral interventions: Evidence from a field experiment on resource conservation," Journal of Public Economics, Elsevier, vol. 228(C).

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    More about this item

    Keywords

    social norms; financial incentives; energy conservation; field experiment;
    All these keywords.

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles

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