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Testing for crowd out in social nudges: Evidence from a natural field experiment in the market for electricity

Author

Listed:
  • Alec Brandon

    (Department of Economics, University of Chicago, Chicago, IL 60637)

  • John A. List

    (Department of Economics, University of Chicago, Chicago, IL 60637)

  • Robert D. Metcalfe

    (Questrom School of Business, Boston University, Boston, MA 02215)

  • Michael K. Price

    (Department of Economics, Finance, and Legal Studies, University of Alabama, Tuscaloosa, AL 35487)

  • Florian Rundhammer

    (Department of Economics, Georgia State University, Atlanta, GA 30302)

Abstract

This study considers the response of household electricity consumption to social nudges during peak load events. Our investigation considers two social nudges. The first targets conservation during peak load events, while the second promotes aggregate conservation. Using data from a natural field experiment with 42,100 households, we find that both social nudges reduce peak load electricity consumption by 2 to 4% when implemented in isolation and by nearly 7% when implemented in combination. These findings suggest an important role for social nudges in the regulation of electricity markets and a limited role for crowd out effects.

Suggested Citation

  • Alec Brandon & John A. List & Robert D. Metcalfe & Michael K. Price & Florian Rundhammer, 2019. "Testing for crowd out in social nudges: Evidence from a natural field experiment in the market for electricity," Proceedings of the National Academy of Sciences, Proceedings of the National Academy of Sciences, vol. 116(12), pages 5293-5298, March.
    • Handle: RePEc:nas:journl:v:116:y:2019:p:5293-5298
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    References listed on IDEAS

    as
    1. Montgomery, W. David, 1972. "Markets in licenses and efficient pollution control programs," Journal of Economic Theory, Elsevier, vol. 5(3), pages 395-418, December.
    2. Baumol,William J. & Oates,Wallace E., 1988. "The Theory of Environmental Policy," Cambridge Books, Cambridge University Press, number 9780521322249.
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