Moral utility or Moral Tax? Experimental Study of Electricity Conservation by Social Comparison

Social comparison, such as information on other consumer’s energy usage, can achieve equal or higher performance, compared with economic incentives. However, previous studies do not adequately reveal the informational content for social comparison that can encourage electricity conservation. This study investigates the effects of different social comparisons via a laboratory experiment. We set up a hypothetical situation of electricity use in a laboratory. Although many previous studies employing laboratory experiments invite residents as the subject of the experiments, the subject’s economic situation does not reflect the initial setting of the laboratory experiments. In our experiment, we set up the initial set of experiments based on each subject’s actual electricity usage in daily life. Therefore, our experiments approximate real behavior better than previous studies. The results show that any information about other consumers’ electricity usage increases the electricity conservation behavior of almost all the subjects. Thus, our results show that voluntary conservation by the social comparison scheme can improve the total welfare of the society. However, the results also demonstrate the importance of considering the psychological effect of social comparison.