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

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  • Alec Brandon
  • John List
  • Robert Metcalfe
  • Michael Price
  • Florian Rundhammer

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.

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  • Alec Brandon & John List & Robert Metcalfe & Michael Price & Florian Rundhammer, 2019. "Testing for crowd out in social nudges: Evidence from a natural field experiment in the market for electricity," Natural Field Experiments 00669, The Field Experiments Website.
    • Handle: RePEc:feb:natura:00669
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    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, January.
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    1. Peter John Robinson & W. J. Wouter Botzen, 2022. "Setting descriptive norm nudges to promote demand for insurance against increasing climate change risk," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 47(1), pages 27-49, January.
    2. Löschel, Andreas & Price, Michael Keith & Razzolini, Laura & Werthschulte, Madeline, 2022. "COVID-19 and the formation of energy conservation routines: Disentangling the relative importance of attention and income shocks," ZEW Discussion Papers 22-068, ZEW - Leibniz Centre for European Economic Research.
    3. Joseph,George & Ayling,Sophie Charlotte Emi & Miquel-Florensa,Pepita & Bejarano,Hernán D. & Cardona,Alejandra Quevedo, 2021. "Behavioral Insights in Infrastructure Sectors : A Survey," Policy Research Working Paper Series 9704, The World Bank.
    4. Riehm, Tobias & Fugger, Nicolas & Gillen, Philippe & Gretschko, Vitali & Werner, Peter, 2022. "Social norms, sanctions, and conditional entry in markets with externalities: Evidence from an artefactual field experiment," Journal of Public Economics, Elsevier, vol. 212(C).
    5. Migchelbrink, Koen & Raymaekers, Pieter, 2023. "Nudging people to pay their parking fines on time. Evidence from a cluster-randomized field experiment," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 105(C).
    6. Kenneth Gillingham & Bryan Bollinger, 2020. "Social Learning and Solar Photovoltaic Adoption," CESifo Working Paper Series 8434, CESifo.
    7. Kayo Murakami & Hideki Shimada & Yoshiaki Ushifusa & Takanori Ida, 2022. "Heterogeneous Treatment Effects Of Nudge And Rebate: Causal Machine Learning In A Field Experiment On Electricity Conservation," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 63(4), pages 1779-1803, November.
    8. Brent, Daniel & Wichman, Casey, 2022. "Do Behavioral Nudges Interact with Prevailing Economic Incentives? Pairing Experimental and Quasi-Experimental Evidence from Water Consumption," RFF Working Paper Series 22-02, Resources for the Future.
    9. Boun My, Kene & Nguyen-Van, Phu & Kim Cuong Pham, Thi & Stenger, Anne & Tiet, Tuyen & To-The, Nguyen, 2022. "Drivers of organic farming: Lab-in-the-field evidence of the role of social comparison and information nudge in networks in Vietnam," Ecological Economics, Elsevier, vol. 196(C).
    10. James R. Meldrum & Hannah Brenkert-Smith & Patricia A. Champ & Jamie Gomez & Hilary Byerly & Lilia Falk & Christopher M. Barth, 2021. "Would you like to know more? The effect of personalized wildfire risk information and social comparisons on information-seeking behavior in the wildland–urban interface," 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. 106(3), pages 2139-2161, April.
    11. Jessoe, Katrina & Lade, Gabriel E. & Loge, Frank & Spang, Edward, 2021. "Residential water conservation during drought: Experimental evidence from three behavioral interventions," Journal of Environmental Economics and Management, Elsevier, vol. 110(C).
    12. Timilsina, Raja R. & Kotani, Koji & Nakagawa, Yoshinori & Saijo, Tatsuyoshi, 2022. "Intragenerational deliberation and intergenerational sustainability dilemma," European Journal of Political Economy, Elsevier, vol. 73(C).
    13. Jesse Burkhardt & Kenneth Gillingham & Praveen K. Kopalle, 2019. "Experimental Evidence on the Effect of Information and Pricing on Residential Electricity Consumption," NBER Working Papers 25576, National Bureau of Economic Research, Inc.
    14. Wang, Wenjie & Ida, Takanori & Shimada, Hideki, 2020. "Default effect versus active decision: Evidence from a field experiment in Los Alamos," European Economic Review, Elsevier, vol. 128(C).
    15. Brülisauer, Marcel & Goette, Lorenz & Jiang, Zhengyi & Schmitz, Jan & Schubert, Renate, 2020. "Appliance-specific feedback and social comparisons: Evidence from a field experiment on energy conservation," Energy Policy, Elsevier, vol. 145(C).
    16. Ghesla, Claus & Grieder, Manuel & Schmitz, Jan & Stadelmann, Marcel, 2020. "Pro-environmental incentives and loss aversion: A field experiment on electricity saving behavior," Energy Policy, Elsevier, vol. 137(C).
    17. Denis Tverskoi & Andrea Guido & Giulia Andrighetto & Angel Sánchez & Sergey Gavrilets, 2023. "Disentangling material, social, and cognitive determinants of human behavior and beliefs," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-13, December.
    18. Zhang, Chaoqun & Zha, Donglan & Jiang, Pansong & Wang, Fu & Yang, Guanglei & Salman, Muhammad & Wu, Qing, 2023. "The effect of customized information feedback on individual electricity saving behavior: Evidence from a field experiment in China," Technological Forecasting and Social Change, Elsevier, vol. 193(C).
    19. Chiara Sotis & Miriam Allena & Renny Reyes & Alessandro Romano, 2021. "COVID-19 Vaccine Passport and International Traveling: The Combined Effect of Two Nudges on Americans’ Support for the Pass," IJERPH, MDPI, vol. 18(16), pages 1-17, August.
    20. Chi L. Ta, 2021. "Theoretical and Empirical Evaluation of a Competitive Energy Rebate Program," CESifo Working Paper Series 8948, CESifo.
    21. Cascavilla, Alessandro, 2022. "Does climate change concern alter tax morale preferences? Evidence from an Italian survey," MPRA Paper 113039, University Library of Munich, Germany.
    22. d'Adda, Giovanna & Galliera, Arianna & Tavoni, Massimo, 2020. "Urgency and engagement: Empirical evidence from a large-scale intervention on energy use awareness," Journal of Economic Psychology, Elsevier, vol. 81(C).
    23. Kenneth T. Gillingham & Bryan Bollinger, 2021. "Social Learning and Solar Photovoltaic Adoption," Management Science, INFORMS, vol. 67(11), pages 7091-7112, November.
    24. Wang, Pengyu & Fang, Debin & Wang, Shuyi, 2022. "Optimal dynamic regulation in retail electricity market with consumer feedback and social learning," Energy Policy, Elsevier, vol. 168(C).
    25. Spandagos, Constantine & Baark, Erik & Ng, Tze Ling & Yarime, Masaru, 2021. "Social influence and economic intervention policies to save energy at home: Critical questions for the new decade and evidence from air-condition use," Renewable and Sustainable Energy Reviews, Elsevier, vol. 143(C).

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