Working Paper: NBER ID: w31845
Authors: Mark A. Andor; Lorenz Goette; Michael K. Price; Anna Schulze Tilling; Lukas Tomberg
Abstract: We compare the behavior and welfare effects of two popular interventions for resource conservation. The first intervention is social comparison reports (SC), which primarily provide consumers with information motivating behavioral change. The second intervention is real-time feedback (RTF), which primarily provides consumers with information facilitating behavioral change. In a field experiment with around 1,000 participants, we directly observe the interventions’ effects on participants’ behavior. Further, we elicit participants’ willingness to pay for receiving the interventions, both before and after having experienced them for one month. We find that SC leads to a reduction in water use per shower by 9.4%, RTF by 28.8%, and the combination (BOTH) by 35.0%. Our willingness to pay results show that all interventions are highly valued by participants and that willingness to pay for RTF and BOTH is significantly higher than for SC. Furthermore, we find that the valuation of the interventions do not change following one-month experience. Our results suggest that while both interventions improve welfare, providing consumers with information facilitating behavioral change achieves a higher impact and a slightly higher welfare increase than providing consumers with information motivating behavioral change.
Keywords: behavioral economics; resource conservation; social comparison; real-time feedback; welfare analysis
JEL Codes: C93; D12; Q25; Q55
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| RTF intervention (R20) | reduction in water use per shower (Q25) |
| SC intervention (C26) | reduction in water use per shower (Q25) |
| RTF and SC interventions (R20) | reduction in water use per shower (Q25) |
| RTF intervention (R20) | increase in consumer welfare (D11) |
| SC intervention (C26) | increase in consumer welfare (D11) |
| RTF and SC interventions (R20) | increase in consumer welfare (D11) |
| RTF intervention (R20) | higher willingness to pay (WTP) (D11) |
| RTF and SC interventions (R20) | higher willingness to pay (WTP) (D11) |