Working Paper: NBER ID: w20363
Authors: Hunt Allcott
Abstract: This review paper provides an overview of the application of behavioral public economics to energy efficiency. I document policymakers' arguments for “paternalistic” energy efficiency policies, formalize with a simple model of misoptimizing consumers, review and critique empirical evidence, and suggest future research directions. While empirical results suggest that policies to address imperfect information and internalities may increase welfare in some cases, some existing policies may be mistargeted or miscalibrated.
Keywords: No keywords provided
JEL Codes: D03; D12; D83; H21; L51; L94; Q41; Q48
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| imperfect information and internalities (D89) | increase consumer welfare (D69) |
| subsidies for energy-efficient goods (Q48) | increase consumer welfare (D69) |
| minimum energy efficiency standards (Q41) | increase consumer welfare (D69) |
| consumer mistakes (D18) | suboptimal purchasing decisions (D91) |
| present bias and misperceptions of energy costs (Q41) | undervalue future energy savings (Q47) |
| suboptimal purchasing decisions (D91) | decrease consumer welfare (D11) |