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Neighbors, Knowledge, and Nuggets: Two Natural Field Experiments on the Role of Incentives on Energy Conservation

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  • Paul Dolan
  • Robert Metcalfe

Abstract

There is increasing research on the exogenous impact of descriptive social norms on economic behavior. The research to date has a number of limitations: 1) it has not de-coupled the impact of the norm and the knowledge required to understand how to change behavior based upon it; 2) it has exclusively used offline but not online (i.e. emails) methods; and 3) it has not understood the impact of financial incentives in conjunction with norms. We address these three limitations using two natural field experiments. We find, firstly, that norms change energy behavior over a 15 month treatment period irrespective of whether information is provided or not. We find that social norms reduce consumption by around 6% (0.2 standard deviations). Norms have has their largest impact on the day that information on the social norm is received, and then decreases over time. Secondly, we do not find that social norms work online (even with experienced consumers who are used to online billing) - social norms de- livered online may have very little beneficial effects on reducing energy use. Thirdly, we find that large financial rewards work very well online in reducing consumption, with a 0.35 change in energy consumption over a four month period. Perhaps most interestingly, we find that the large effect of financial incentives is completely removed when information on social norms is added online.

Suggested Citation

  • Paul Dolan & Robert Metcalfe, 2013. "Neighbors, Knowledge, and Nuggets: Two Natural Field Experiments on the Role of Incentives on Energy Conservation," Natural Field Experiments 00404, The Field Experiments Website.
  • Handle: RePEc:feb:natura:00404
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    References listed on IDEAS

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    Cited by:

    1. Stenner, Karen & Frederiks, Elisha R. & Hobman, Elizabeth V. & Cook, Stephanie, 2017. "Willingness to participate in direct load control: The role of consumer distrust," Applied Energy, Elsevier, vol. 189(C), pages 76-88.
    2. Asensio, Omar Isaac & Delmas, Magali A., 2016. "The dynamics of behavior change: Evidence from energy conservation," Journal of Economic Behavior & Organization, Elsevier, vol. 126(PA), pages 196-212.
    3. 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.
    4. Sudarshan, Anant, 2017. "Nudges in the marketplace: The response of household electricity consumption to information and monetary incentives," Journal of Economic Behavior & Organization, Elsevier, vol. 134(C), pages 320-335.
    5. Schall, Dominik L. & Wolf, Menas & Mohnen, Alwine, 2016. "Do effects of theoretical training and rewards for energy-efficient behavior persist over time and interact? A natural field experiment on eco-driving in a company fleet," Energy Policy, Elsevier, vol. 97(C), pages 291-300.
    6. Hunt Allcott & Richard Sweeney, 2014. "The Role of Sales Agents in Information Disclosure: Evidence from a Field Experiment," NBER Working Papers 20048, National Bureau of Economic Research, Inc.
    7. Broberg, Thomas & Persson, Lars, 2016. "Is our everyday comfort for sale? Preferences for demand management on the electricity market," Energy Economics, Elsevier, vol. 54(C), pages 24-32.
    8. repec:eee:eneeco:v:69:y:2018:i:c:p:204-212 is not listed on IDEAS
    9. Schall, Dominik L. & Mohnen, Alwine, 2017. "Incentivizing energy-efficient behavior at work: An empirical investigation using a natural field experiment on eco-driving," Applied Energy, Elsevier, vol. 185(P2), pages 1757-1768.
    10. repec:eee:ecolec:v:148:y:2018:i:c:p:178-210 is not listed on IDEAS

    More about this item

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

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