Working Paper: NBER ID: w23355
Authors: 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 low-variance 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.”
Keywords: Energy Conservation; Behavioral Economics; Natural Field Experiment; Financial Incentives; Social Norms
JEL Codes: C93; D03; Q4
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Rewards Program (M52) | Energy Conservation (Q41) |
| HERs (I10) | Energy Conservation (Q41) |
| Rewards Program + HERs (M52) | Energy Conservation (Q41) |
| Rewards Program (M52) | Additional Energy Conservation (Q41) |
| HERs (I10) | Additional Energy Conservation (Q41) |
| Low-Variance Users + Rewards Program (D26) | Energy Conservation (Q41) |