Working Paper: CEPR ID: DP14954
Authors: Andreas Gerster; Mark Andor; Lorenz Goette
Abstract: Novel information technologies hold the promise to improve decision making. In the context of smart metering, we investigate the impact of providing households with appliance-level electricity feedback. In a randomized controlled trial, we find that the provision of appliance-level feedback creates a conservation effect of an additional 5% relative to a group receiving standard (aggregate) feedback. These conservation effects are largely driven by reductions in electricity use of 10% to 15% during peak hours. Consumers with appliance-level feedback hold more accurate beliefs about the energy consumption of different appliances, consistent with the mechanism in our accompanying model. Our result suggests that conservation effects from a smart-meter rollout will be much larger if appliance-level feedback can be provided. Based on a sufficient statistics approach, we estimate that appliance-level feedback could raise consumer surplus by about 570 to 600 million Euro per annum for German households.
Keywords: Randomized Controlled Trial; Disaggregation; Consumption Feedback; Energy Conservation
JEL Codes: D12; D83; L94; Q41
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| appliance-level feedback (L68) | energy conservation (Q41) |
| appliance-level feedback (L68) | belief accuracy about energy consumption (Q41) |
| belief accuracy about energy consumption (Q41) | energy conservation (Q41) |
| appliance-level feedback (L68) | consumer surplus increase (D11) |
| smart meter rollouts + appliance-level feedback (L68) | larger conservation effects (Q20) |