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Heterogeneous treatment effects and mechanisms in information-based environmental policies: Evidence from a large-scale field experiment

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  • Ferraro, Paul J.
  • Miranda, Juan José

Abstract

Policymakers often rely on non-pecuniary, information-based programs to achieve social objectives. Using data from a water conservation information campaign implemented as a randomized controlled trial, we estimate heterogeneous household responses. Understanding such heterogeneity is important for improving the cost-effectiveness of non-pecuniary programs, extending them to other populations and probing the mechanisms through which the treatment effects arise. We find little evidence of heterogeneous responses to purely technical information or to traditional conservation messages that combine technical information and moral suasion. In contrast, norm-based messages that combine technical information, moral suasion and social comparisons exhibit strong heterogeneity: households that are wealthier, owner-occupied and use more water are more responsive. These subgroups tend to be least responsive to pecuniary incentives. We find no evidence that any subgroup increases their water use in response to the messages. By targeting the messages to subgroups known to be most responsive, program costs could be reduced by over 50% with only a 20% reduction in the treatment effect. Combining theory and data, we also shed light on the mechanisms through which the treatment effects arise, which has implications for program design and future research on the program's welfare effects.

Suggested Citation

  • Ferraro, Paul J. & Miranda, Juan José, 2013. "Heterogeneous treatment effects and mechanisms in information-based environmental policies: Evidence from a large-scale field experiment," Resource and Energy Economics, Elsevier, vol. 35(3), pages 356-379.
  • Handle: RePEc:eee:resene:v:35:y:2013:i:3:p:356-379
    DOI: 10.1016/j.reseneeco.2013.04.001
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    Cited by:

    1. Hunt Allcott & Todd Rogers, 2012. "The Short-Run and Long-Run Effects of Behavioral Interventions: Experimental Evidence from Energy Conservation," NBER Working Papers 18492, National Bureau of Economic Research, Inc.
    2. Schubert, Christian, 2017. "Green nudges: Do they work? Are they ethical?," Ecological Economics, Elsevier, vol. 132(C), pages 329-342.
    3. Alec Brandon & Paul J. Ferraro & John A. List & Robert D. Metcalfe & Michael K. Price & Florian Rundhammer, 2017. "Do The Effects of Social Nudges Persist? Theory and Evidence from 38 Natural Field Experiments," NBER Working Papers 23277, National Bureau of Economic Research, Inc.
    4. María Bernedo & Paul Ferraro & Michael Price, 2014. "The Persistent Impacts of Norm-Based Messaging and Their Implications for Water Conservation," Journal of Consumer Policy, Springer, vol. 37(3), pages 437-452, September.
    5. Ferraro, Paul J. & Miranda, Juan José, 2014. "The performance of non-experimental designs in the evaluation of environmental programs: A design-replication study using a large-scale randomized experiment as a benchmark," Journal of Economic Behavior & Organization, Elsevier, vol. 107(PA), pages 344-365.
    6. Szabó, Andrea & Ujhelyi, Gergely, 2015. "Reducing nonpayment for public utilities: Experimental evidence from South Africa," Journal of Development Economics, Elsevier, vol. 117(C), pages 20-31.
    7. repec:eee:jeeman:v:86:y:2017:i:c:p:141-159 is not listed on IDEAS
    8. David P. Byrne & Andrea La Nauze & Leslie A.Martin, 2014. "Tell Me Something I Don’t Already Know:Informedness and External Validity in Information Programs," Department of Economics - Working Papers Series 1180, The University of Melbourne.
    9. Jaime Torres, Mónica Marcela & Carlsson, Fredrik, 2016. "Social Norms and Information Diffusion in Water-saving Programs: Evidence from a Randomized Field Experiment in Colombia," Working Papers in Economics 652, University of Gothenburg, Department of Economics.
    10. Vandercasteelen, Joachim & Dereje, Mekdim & Minten, Bart & Taffesse, Alemayehu Seyoum, 2013. "Scaling-up adoption of improved technologies: The impact of the promotion of row planting on farmers’ teff yields in Ethiopia:," ESSP working papers 60, International Food Policy Research Institute (IFPRI).
    11. repec:now:jirere:101.00000084 is not listed on IDEAS
    12. Huber, Martin & Kotevska, Ana & Martinovska-Stojcheska, A. & Solovyeva, Anna, 2016. "Evaluating an information campaign about rural development policies in (FYR) Macedonia," FSES Working Papers 469, Faculty of Economics and Social Sciences, University of Freiburg/Fribourg Switzerland.
    13. Wichman, Casey J., 2017. "Information provision and consumer behavior: A natural experiment in billing frequency," Journal of Public Economics, Elsevier, vol. 152(C), pages 13-33.
    14. Brent, Daniel A. & Cook, Joseph H. & Olsen, Skylar, 2013. "Heterogeneous Responses to Social Norms for Water Conservation," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 149697, Agricultural and Applied Economics Association.
    15. Nemati, Mehdi & Buck, Steven & Soldati, Hilary, 2017. "The E ffect of Social and Consumption Analytics on Residential Water Demand," 2017 Annual Meeting, February 4-7, 2017, Mobile, Alabama 252738, Southern Agricultural Economics Association.
    16. Daniel A. Brent & Joseph H. Cook & Skylar Olsen, 2015. "Social Comparisons, Household Water Use, and Participation in Utility Conservation Programs: Evidence from Three Randomized Trials," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 2(4), pages 597-627.
    17. Brent, Daniel A. & Friesen, Lana & Gangadharan, Lata & Leibbrandt, Andreas, 2017. "Behavioral Insights from Field Experiments in Environmental Economics," International Review of Environmental and Resource Economics, now publishers, vol. 10(2), pages 95-143, May.
    18. Andrea Szabo & Gergely Ujhelyi, 2014. "Can Information Reduce Nonpayment for Public Utilities? Experimental Evidence from South Africa," Working Papers 2014-114-31, Department of Economics, University of Houston.

    More about this item

    Keywords

    Program evaluation; Experimental design; Conditional average treatment effects; Quantile average treatment effects; Other-regarding preferences; Social norms;

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • L95 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Gas Utilities; Pipelines; Water Utilities
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water

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