IDEAS home Printed from https://ideas.repec.org/a/eee/tefoso/v169y2021ics0040162521002249.html
   My bibliography  Save this article

Effect and mechanism of monetary incentives and moral suasion on residential peak-hour electricity usage

Author

Listed:
  • Wang, Bo
  • Deng, Nana
  • Li, Haoxiang
  • Zhao, Wenhui
  • Liu, Jie
  • Wang, Zhaohua

Abstract

One of the most important economic principles is that people respond to incentives. Economics is essentially the study of incentives. However, whether these incentives can replace attitudes and norms that deserve our protection is still unclear especially in the field of environment. And to answer this question, residents’ demand response (DR) for energy conservation and emission reduction trials have been taken. Large-scale, hybrid frequency historical data for electricity usage and microcosmic behavior data have been integrated and analyzed. Empirical results show that monetary incentives have a significant effect on residents’ electricity saving behavior, which saved 0.116 kgwatt-hours (kWh), accounting for 12% of the total demand in peak-hour consumption. Moral suasion has a significant effect only for residents from high-income communities with a reduction in usage by 8.9%. Through matching survey data analysis, we found that families participating in DR save electricity through adjusting other major and small appliances rather than reducing the usage of air conditioners. Families with large number of major and small appliances response 0.51 kWh and 0.38 kWh more, respectively. Monetary incentive is indispensable in China's current stage of encouraging families’ reducing peak-hour electricity usage.

Suggested Citation

  • Wang, Bo & Deng, Nana & Li, Haoxiang & Zhao, Wenhui & Liu, Jie & Wang, Zhaohua, 2021. "Effect and mechanism of monetary incentives and moral suasion on residential peak-hour electricity usage," Technological Forecasting and Social Change, Elsevier, vol. 169(C).
    • Handle: RePEc:eee:tefoso:v:169:y:2021:i:c:s0040162521002249
    DOI: 10.1016/j.techfore.2021.120792
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0040162521002249
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.techfore.2021.120792?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Jordehi, A. Rezaee, 2019. "Optimisation of demand response in electric power systems, a review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 103(C), pages 308-319.
    2. Darshana Rajapaksa & Robert Gifford & Benno Torgler & María A. García-Valiñas & Wasantha Athukorala & Shunsuke Managi & Clevo Wilson, 2019. "Do monetary and non-monetary incentives influence environmental attitudes and behavior? Evidence from an experimental analysis," Post-Print hal-03191523, HAL.
    3. Wenwen Wang & Ming Zhang, 2015. "Direct and indirect energy consumption of rural households in China," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 79(3), pages 1693-1705, December.
    4. Wang, Bo & Wang, Xiaomeng & Guo, Dongxue & Zhang, Bin & Wang, Zhaohua, 2018. "Analysis of factors influencing residents’ habitual energy-saving behaviour based on NAM and TPB models: Egoism or altruism?," Energy Policy, Elsevier, vol. 116(C), pages 68-77.
    5. Lynch, Muireann Á. & Nolan, Sheila & Devine, Mel T. & O’Malley, Mark, 2019. "The impacts of demand response participation in capacity markets," Applied Energy, Elsevier, vol. 250(C), pages 444-451.
    6. Paterakis, Nikolaos G. & Erdinç, Ozan & Catalão, João P.S., 2017. "An overview of Demand Response: Key-elements and international experience," Renewable and Sustainable Energy Reviews, Elsevier, vol. 69(C), pages 871-891.
    7. Cho, Haeran & Goude, Yannig & Brossat, Xavier & Yao, Qiwei, 2013. "Modeling and forecasting daily electricity load curves: a hybrid approach," LSE Research Online Documents on Economics 49634, London School of Economics and Political Science, LSE Library.
    8. Monyei, C.G. & Adewumi, A.O., 2017. "Demand Side Management potentials for mitigating energy poverty in South Africa," Energy Policy, Elsevier, vol. 111(C), pages 298-311.
    9. Petra Moser & Alessandra Voena, 2012. "Compulsory Licensing: Evidence from the Trading with the Enemy Act," American Economic Review, American Economic Association, vol. 102(1), pages 396-427, February.
    10. Yating Li & William A. Pizer & Libo Wu, 2019. "Climate change and residential electricity consumption in the Yangtze River Delta, China," Proceedings of the National Academy of Sciences, Proceedings of the National Academy of Sciences, vol. 116(2), pages 472-477, January.
    11. Yoldaş, Yeliz & Önen, Ahmet & Muyeen, S.M. & Vasilakos, Athanasios V. & Alan, İrfan, 2017. "Enhancing smart grid with microgrids: Challenges and opportunities," Renewable and Sustainable Energy Reviews, Elsevier, vol. 72(C), pages 205-214.
    12. Y, Kiguchi & Y, Heo & M, Weeks & R, Choudhary, 2019. "Predicting intra-day load profiles under time-of-use tariffs using smart meter data," Energy, Elsevier, vol. 173(C), pages 959-970.
    13. Zhang, Ming & Su, Bin, 2016. "Assessing China's rural household energy sustainable development using improved grouped principal component method," Energy, Elsevier, vol. 113(C), pages 509-514.
    14. Heggie, Alastair & Eager, Dan & McKinnon, Ken & Van Der Weijde, Adriaan H., 2018. "Power rationing in a long-term power shortage," Energy Policy, Elsevier, vol. 121(C), pages 202-210.
    15. Sun, Chuanwang & Lin, Boqiang, 2013. "Reforming residential electricity tariff in China: Block tariffs pricing approach," Energy Policy, Elsevier, vol. 60(C), pages 741-752.
    16. Haeran Cho & Yannig Goude & Xavier Brossat & Qiwei Yao, 2013. "Modeling and Forecasting Daily Electricity Load Curves: A Hybrid Approach," Journal of the American Statistical Association, Taylor & Francis Journals, vol. 108(501), pages 7-21, March.
    17. Wang, Zhaohua & Li, Hao & Deng, Nana & Cheng, Kaiwei & Lu, Bin & Zhang, Bin & Wang, Bo, 2020. "How to effectively implement an incentive-based residential electricity demand response policy? Experience from large-scale trials and matching questionnaires," Energy Policy, Elsevier, vol. 141(C).
    18. Unknown, 2016. "Energy for Sustainable Development," Conference Proceedings 253270, Guru Arjan Dev Institute of Development Studies (IDSAsr).
    19. Zhang, Sufang & Jiao, Yiqian & Chen, Wenjun, 2017. "Demand-side management (DSM) in the context of China's on-going power sector reform," Energy Policy, Elsevier, vol. 100(C), pages 1-8.
    20. Li, Weilin & Xu, Peng & Lu, Xing & Wang, Huilong & Pang, Zhihong, 2016. "Electricity demand response in China: Status, feasible market schemes and pilots," Energy, Elsevier, vol. 114(C), pages 981-994.
    21. Zhang, Ming & Song, Yan & Li, Peng & Li, Huanan, 2016. "Study on affecting factors of residential energy consumption in urban and rural Jiangsu," Renewable and Sustainable Energy Reviews, Elsevier, vol. 53(C), pages 330-337.
    22. Derakhshan, Ghasem & Shayanfar, Heidar Ali & Kazemi, Ahad, 2016. "The optimization of demand response programs in smart grids," Energy Policy, Elsevier, vol. 94(C), pages 295-306.
    23. Alasseri, Rajeev & Rao, T. Joji & Sreekanth, K.J., 2020. "Institution of incentive-based demand response programs and prospective policy assessments for a subsidized electricity market," Renewable and Sustainable Energy Reviews, Elsevier, vol. 117(C).
    24. Liang, Zhuoran & Tian, Zhan & Sun, Laixiang & Feng, Kuishuang & Zhong, Honglin & Gu, Tingting & Liu, Xiaochen, 2016. "Heat wave, electricity rationing, and trade-offs between environmental gains and economic losses: The example of Shanghai," Applied Energy, Elsevier, vol. 184(C), pages 951-959.
    25. Mizobuchi, Kenichi & Takeuchi, Kenji, 2013. "The influences of financial and non-financial factors on energy-saving behaviour: A field experiment in Japan," Energy Policy, Elsevier, vol. 63(C), pages 775-787.
    26. Sandeep Khurana & Liangfei Qiu & Subodha Kumar, 2019. "When a Doctor Knows, It Shows: An Empirical Analysis of Doctors’ Responses in a Q&A Forum of an Online Healthcare Portal," Information Systems Research, INFORMS, vol. 30(3), pages 872-891, September.
    27. Koichiro Ito & Takanori Ida & Makoto Tanaka, 2018. "Moral Suasion and Economic Incentives: Field Experimental Evidence from Energy Demand," American Economic Journal: Economic Policy, American Economic Association, vol. 10(1), pages 240-267, February.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wang, Zhaohua & Li, Hao & Deng, Nana & Cheng, Kaiwei & Lu, Bin & Zhang, Bin & Wang, Bo, 2020. "How to effectively implement an incentive-based residential electricity demand response policy? Experience from large-scale trials and matching questionnaires," Energy Policy, Elsevier, vol. 141(C).
    2. Min He & Pei Liu & Linwei Ma & Chinhao Chong & Xu Li & Shizhong Song & Zheng Li & Weidou Ni, 2018. "A Systems Analysis of the Development Status and Trends of Rural Household Energy in China," Energies, MDPI, vol. 11(7), pages 1-23, July.
    3. Hernández, Francisco & Jaime, Marcela & Vásquez, Felipe, 2024. "Nudges versus prices: Lessons and challenges from a water-savings program," Energy Economics, Elsevier, vol. 134(C).
    4. Niu, Shuwen & Li, Zhen & Qiu, Xin & Dai, Runqi & Wang, Xiang & Qiang, Wenli & Hong, Zhenguo, 2019. "Measurement of effective energy consumption in China's rural household sector and policy implication," Energy Policy, Elsevier, vol. 128(C), pages 553-564.
    5. Dranka, Géremi Gilson & Ferreira, Paula, 2019. "Review and assessment of the different categories of demand response potentials," Energy, Elsevier, vol. 179(C), pages 280-294.
    6. Xu, Jiuping & Liu, Tingting, 2020. "Technological paradigm-based approaches towards challenges and policy shifts for sustainable wind energy development," Energy Policy, Elsevier, vol. 142(C).
    7. Li, Jianglong & Chen, Chang & Liu, Hongxun, 2019. "Transition from non-commercial to commercial energy in rural China: Insights from the accessibility and affordability," Energy Policy, Elsevier, vol. 127(C), pages 392-403.
    8. Zhang, Guoxing & Nuruzzaman, Md & Su, Bin, 2021. "Nexus between household energy consumption and economic growth in Bangladesh (1975–2018)," Energy Policy, Elsevier, vol. 156(C).
    9. Bo wang & Nana Deng & Wenhui Zhao & Zhaohua Wang, 2022. "Residential power demand side management optimization based on fine-grained mixed frequency data," Annals of Operations Research, Springer, vol. 316(1), pages 603-622, September.
    10. Tao Lin & Junna Yan, 2017. "Investigating the sensitivity factors of household indirect CO2 emission from the production side," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 88(2), pages 721-740, September.
    11. Jordehi, A. Rezaee, 2019. "Optimisation of demand response in electric power systems, a review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 103(C), pages 308-319.
    12. McPherson, Madeleine & Stoll, Brady, 2020. "Demand response for variable renewable energy integration: A proposed approach and its impacts," Energy, Elsevier, vol. 197(C).
    13. repec:cte:wsrepe:ws1506 is not listed on IDEAS
    14. Meyabadi, A. Fattahi & Deihimi, M.H., 2017. "A review of demand-side management: Reconsidering theoretical framework," Renewable and Sustainable Energy Reviews, Elsevier, vol. 80(C), pages 367-379.
    15. repec:hum:wpaper:sfb649dp2014-030 is not listed on IDEAS
    16. Jianfeng Guo & Bin Su & Guang Yang & Lianyong Feng & Yinpeng Liu & Fu Gu, 2018. "How Do Verified Emissions Announcements Affect the Comoves between Trading Behaviors and Carbon Prices? Evidence from EU ETS," Sustainability, MDPI, vol. 10(9), pages 1-17, September.
    17. Wang, Zhaohua & Pham, Thi Le Hoa & Sun, Kaining & Wang, Bo & Bui, Quocviet & Hashemizadeh, Ali, 2022. "The moderating role of financial development in the renewable energy consumption - CO2 emissions linkage: The case study of Next-11 countries," Energy, Elsevier, vol. 254(PB).
    18. Lin, Boqiang & Chen, Xing, 2018. "Is the implementation of the Increasing Block Electricity Prices policy really effective?--- Evidence based on the analysis of synthetic control method," Energy, Elsevier, vol. 163(C), pages 734-750.
    19. Angeliki N. Menegaki, 2021. "Towards a Global Energy-Sustainable Economy Nexus; Summing up Evidence from Recent Empirical Work," Energies, MDPI, vol. 14(16), pages 1-16, August.
    20. Lin, Jin & Dong, Jun & Liu, Dongran & Zhang, Yaoyu & Ma, Tongtao, 2022. "From peak shedding to low-carbon transitions: Customer psychological factors in demand response," Energy, Elsevier, vol. 238(PA).
    21. Astriani, Yuli & Shafiullah, GM & Shahnia, Farhad, 2021. "Incentive determination of a demand response program for microgrids," Applied Energy, Elsevier, vol. 292(C).
    22. Zhang, Chonghui & Wang, Zhen & Su, Weihua & Dalia, Streimikiene, 2024. "Differentiated power rationing or seasonal power price? Optimal power allocation solution for Chinese industrial enterprises based on the CSW-DEA model," Applied Energy, Elsevier, vol. 353(PB).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:tefoso:v:169:y:2021:i:c:s0040162521002249. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.sciencedirect.com/science/journal/00401625 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.