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Why does real-time information reduce energy consumption?

Author

Listed:
  • John Lynham

    (Department of Economics, University of Hawaii at Manoa and UHERO)

  • Kohei Nitta

    (Department of Economics, University of Hawaii at Manoa)

  • Tatsuyoshi Saijo

    (School of Management, Kochi University of Technology)

  • Nori Tarui

    (Department of Economics, University of Hawaii at Manoa)

Abstract

A number of studies have estimated how much energy conservation is achieved by providing households with real-time information on energy use via in-home displays. However, none of these studies tell us why real-time information changes energy-use behavior. We explore the causal mechanisms through which real-time information affects energy consumption by conducting a randomized-control trial with residential households. The experiment disentangles two competing mechanisms: (i) learning about the energy consumption of various activities, the "learning effect", versus (ii) having a constant reminder of energy use, the "saliency effect". We have two main results. First, we find a statistically significant treatment effect from receiving real-time information. Second, we find that learning plays a more prominent role than saliency in driving energy conservation. This finding supports the use of energy conservation programs that target consumer knowledge regarding energy use.

Suggested Citation

  • John Lynham & Kohei Nitta & Tatsuyoshi Saijo & Nori Tarui, 2014. "Why does real-time information reduce energy consumption?," Working Papers 201419, University of Hawaii at Manoa, Department of Economics.
    • Handle: RePEc:hai:wpaper:201419
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    References listed on IDEAS

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    More about this item

    Keywords

    energy efficiency; energy conservation; real-time information; experiment;
    All these keywords.

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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