The Lightbulb Paradox: Evidence from Two Randomized Experiments
Imperfect information and inattention to energy costs are important potential justifications for energy efficiency standards and subsidies. We evaluate these policies in the lightbulb market using a theoretical model and two randomized experiments. We derive welfare effects as functions of reduced-form sufficient statistics capturing economic and psychological parameters, which we estimate using a novel within-subject information disclosure experiment. In the context of the model, the main results suggest that moderate subsidies for energy efficient lightbulbs may increase welfare, but informational and attentional biases alone do not justify a ban on incandescent lightbulbs.
|Date of creation:||Dec 2013|
|Date of revision:|
|Publication status:||published as Evaluating Behaviorally Motivated Policy: Experimental Evidence from the Lightbulb Market Hunt Allcott Dmitry Taubinsky AMERICAN ECONOMIC REVIEW VOL. 105, NO. 8, AUGUST 2015 (pp. 2501-38)|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
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- Jacob Goldin & Tatiana Homonoff, 2013. "Smoke Gets in Your Eyes: Cigarette Tax Salience and Regressivity," American Economic Journal: Economic Policy, American Economic Association, vol. 5(1), pages 302-36, February.
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