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Paternalism and Energy Efficiency: An Overview

Author

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  • Hunt Allcott

    (Department of Economics, New York University, New York, NY 10012
    National Bureau of Economic Research, Cambridge, Massachusetts 02138
    Abdul Latif Jameel Poverty Action Lab (J-PAL), Massachusetts Institute of Technology, Cambridge, Massachusetts 02142
    ideas42, New York, NY 10004)

Abstract

This article provides an overview of the application of behavioral public economics to energy efficiency. I document policy makers' arguments for “paternalistic” energy efficiency policies, formalize with a simple model of misoptimizing consumers, review and critique empirical evidence, and suggest future research directions. Although 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.

Suggested Citation

  • Hunt Allcott, 2016. "Paternalism and Energy Efficiency: An Overview," Annual Review of Economics, Annual Reviews, vol. 8(1), pages 145-176, October.
    • Handle: RePEc:anr:reveco:v:8:y:2016:p:145-176
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    File URL: http://www.annualreviews.org/doi/10.1146/annurev-economics-080315-015255
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    Cited by:

    1. Oberst, Christian A. & Schmitz, Hendrik & Madlener, Reinhard, 2019. "Are Prosumer Households That Much Different? Evidence From Stated Residential Energy Consumption in Germany," Ecological Economics, Elsevier, vol. 158(C), pages 101-115.
    2. Nicholas Chesterley, 2017. "Defaults, Decision Costs and Welfare in Behavioural Policy Design," Economica, London School of Economics and Political Science, vol. 84(333), pages 16-33, January.
    3. Comerford, David A. & Lange, Ian & Moro, Mirko, 2018. "Proof of concept that requiring energy labels for dwellings can induce retrofitting," Energy Economics, Elsevier, vol. 69(C), pages 204-212.
    4. Bonan, Jacopo & Cattaneo, Cristina & d’Adda, Giovanna & Tavoni, Massimo, 2021. "Can social information programs be more effective? The role of environmental identity for energy conservation," Journal of Environmental Economics and Management, Elsevier, vol. 108(C).
    5. Gillingham, Kenneth & Tsvetanov, Tsvetan, 2018. "Nudging energy efficiency audits: Evidence from a field experiment," Journal of Environmental Economics and Management, Elsevier, vol. 90(C), pages 303-316.
    6. Louis-Gaëtan Giraudet, 2018. "Energy efficiency as a credence good: A review of informational barriers to building energy savings," Working Papers 2018.07, FAERE - French Association of Environmental and Resource Economists.
    7. Rebecca L. C. Taylor, 2020. "A Mixed Bag: The Hidden Time Costs of Regulating Consumer Behavior," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 7(2), pages 345-378.
    8. d'Adda, Giovanna & Galliera, Arianna & Tavoni, Massimo, 2020. "Urgency and engagement: Empirical evidence from a large-scale intervention on energy use awareness," Journal of Economic Psychology, Elsevier, vol. 81(C).
    9. d'Adda, Giovanna & Mahmud, Mahreen & Said, Farah & Bonan, Jacopo, 2020. "The Role of Flexibility and Planning in Repayment Discipline: Evidence from a Field Experiment on Pay-as-You-Go Off-Grid Electricity," RFF Working Paper Series 20-14, Resources for the Future.
    10. Tipoe, Eileen, 2021. "Price inattention: A revealed preference characterisation," European Economic Review, Elsevier, vol. 134(C).
    11. Andor, Mark A. & Gerster, Andreas & Peters, Jörg & Schmidt, Christoph M., 2020. "Social Norms and Energy Conservation Beyond the US," Journal of Environmental Economics and Management, Elsevier, vol. 103(C).
    12. Gill, Carrie & Lang, Corey, 2018. "Learn to conserve: The effects of in-school energy education on at-home electricity consumption," Energy Policy, Elsevier, vol. 118(C), pages 88-96.
    13. IGEI Kengo & KUROKAWA Hirofumi & ISEKI Masato & KITSUKI Akinori & KURITA Kenichi & MANAGI Shunsuke & NAKAMURO Makiko & SAKANO Akira, 2022. "Nudges to Increase the Effectiveness of Environmental Education: New evidence from a field experiment," Discussion papers 22111, Research Institute of Economy, Trade and Industry (RIETI).
    14. Aydin, Erdal & Correa, Santiago Bohórquez & Brounen, Dirk, 2019. "Energy performance certification and time on the market," Journal of Environmental Economics and Management, Elsevier, vol. 98(C).
    15. Zhuangai Li & Xia Cao, 2021. "Effectiveness of China’s Labeling and Incentive Programs for Household Energy Conservation and Policy Implications," Sustainability, MDPI, vol. 13(4), pages 1-17, February.
    16. Dimitris Damigos & Christina Kaliampakou & Anastasios Balaskas & Lefkothea Papada, 2021. "Does Energy Poverty Affect Energy Efficiency Investment Decisions? First Evidence from a Stated Choice Experiment," Energies, MDPI, vol. 14(6), pages 1-17, March.
    17. Kasperbauer, T.J., 2017. "The permissibility of nudging for sustainable energy consumption," Energy Policy, Elsevier, vol. 111(C), pages 52-57.
    18. Cardella, Eric & Ewing, Brad & Williams, Ryan Blake, 2018. "Green is Good – The Impact of Information Nudges on the Adoption of Voluntary Green Power Plans," 2018 Annual Meeting, February 2-6, 2018, Jacksonville, Florida 266583, Southern Agricultural Economics Association.
    19. Giraudet, Louis-Gaëtan, 2020. "Energy efficiency as a credence good: A review of informational barriers to energy savings in the building sector," Energy Economics, Elsevier, vol. 87(C).
    20. Andor, Mark A. & Fels, Katja M., 2018. "Behavioral Economics and Energy Conservation – A Systematic Review of Non-price Interventions and Their Causal Effects," Ecological Economics, Elsevier, vol. 148(C), pages 178-210.
    21. Chabé-Ferret, Sylvain & Reynaud, Arnaud & Tène, Eva, 2021. "Water Quality, Policy Diffusion Effects and Farmers’ Behavior," TSE Working Papers 21-1229, Toulouse School of Economics (TSE).

    More about this item

    Keywords

    behavioral public economics; energy efficiency;

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • 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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