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Evidence from Two Large Field Experiments that Peer Comparison Feedback Can Reduce Residential Energy Usage

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  • Ian Ayres
  • Sophie Raseman
  • Alice Shih

Abstract

By providing feedback to customers on home electricity and natural gas usage with a focus on peer comparisons, utilities can reduce energy consumption at a low cost. We analyze data from two large-scale, random-assignment field experiments conducted by utility companies providing electricity (the Sacramento Municipal Utility District [SMUD]) and electricity and natural gas (Puget Sound Energy [PSE]), in partnership with a private company, Opower, which provides monthly or quarterly mailed peer feedback reports to customers. We find reduction in energy consumption of 1.2% (PSE) to 2.1% percent (SMUD), with the decrease sustained over time (7 months [PSE] and 12 months [SMUD]). (JEL C44, D03, L94, Q41). The Author 2012. Published by Oxford University Press on behalf of Yale University. All rights reserved. For Permissions, please email: journals.permissions@oup.com, Oxford University Press.

Suggested Citation

  • Ian Ayres & Sophie Raseman & Alice Shih, 2013. "Evidence from Two Large Field Experiments that Peer Comparison Feedback Can Reduce Residential Energy Usage," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 29(5), pages 992-1022, October.
    • Handle: RePEc:oup:jleorg:v:29:y:2013:i:5:p:992-1022
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    File URL: http://hdl.handle.net/10.1093/jleo/ews020
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    More about this item

    JEL classification:

    • C44 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Operations Research; Statistical Decision Theory
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • 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

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