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Experimental Evidence on the Effect of Information and Pricing on Residential Electricity Consumption

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  • Jesse Burkhardt
  • Kenneth Gillingham
  • Praveen K. Kopalle

Abstract

This study examines a field experiment in Texas that includes pricing and informational interventions to encourage energy conservation during summer peak load days when the social cost of generation is the highest. We estimate that our critical peak pricing intervention reduces electricity consumption by 14%. Using unique high frequency appliance-level data, we can attribute 74% of this response to air conditioning. In contrast, we find minimal response to active information provision and conservation appeals. A complementary experimental program also lowers nighttime prices during the off-peak season, providing the first evidence of electric vehicle loadshifting in response to price.

Suggested Citation

  • 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.
    • Handle: RePEc:nbr:nberwo:25576
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    Cited by:

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    2. Uddin, Main & Wang, Liang Choon & Smyth, Russell, 2021. "Do government-initiated energy comparison sites encourage consumer search and lower prices? Evidence from an online randomized controlled experiment in Australia," Journal of Economic Behavior & Organization, Elsevier, vol. 188(C), pages 167-182.
    3. Cloé Garnache & Øystein Hernæs & Anders Gravir Imenes, 2022. "Which Households Respond to Electricity Peak Pricing Amid High Levels of Electrification?," CESifo Working Paper Series 9657, CESifo.
    4. Omar Isaac Asensio & Camila Z. Apablaza & M. Cade Lawson & Sarah Elizabeth Walsh, 2022. "A field experiment on workplace norms and electric vehicle charging etiquette," Journal of Industrial Ecology, Yale University, vol. 26(1), pages 183-196, February.
    5. Harding, Matthew & Kettler, Kyle & Lamarche, Carlos & Ma, Lala, 2021. "The (Alleged) Environmental and Social Benefits of Dynamic Pricing," IZA Discussion Papers 14846, Institute of Labor Economics (IZA).
    6. Asmare, Fissha & Jaraitė, Jūratė & Kažukauskas, Andrius, 2021. "The effect of descriptive information provision on electricity consumption: Experimental evidence from Lithuania," Energy Economics, Elsevier, vol. 104(C).
    7. Sibel Sozuer & Gregory S. Carpenter & Praveen K. Kopalle & Leigh M. McAlister & Donald R. Lehmann, 2020. "The past, present, and future of marketing strategy," Marketing Letters, Springer, vol. 31(2), pages 163-174, September.
    8. Andreas Gerster & Mark A. Andor & Lorenz Götte, 2020. "Disaggregate Consumption Feedback and Energy Conservation," CRC TR 224 Discussion Paper Series crctr224_2020_182, University of Bonn and University of Mannheim, Germany.
    9. Hortay, Olivér & Kökény, László, 2020. "A villamosenergia-fogyasztás elhalasztásával kapcsolatos lakossági attitűd felmérése Magyarországon [A survey of popular attitudes to deferment of electricity consumption in Hungary]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(7), pages 657-687.
    10. Liang, Jing & Qiu, Yueming (Lucy) & Xing, Bo, 2022. "Impacts of the co-adoption of electric vehicles and solar panel systems: Empirical evidence of changes in electricity demand and consumer behaviors from household smart meter data," Energy Economics, Elsevier, vol. 112(C).
    11. Jiyong Eom & Frank A. Wolak, 2020. "Breaking Routine for Energy Savings: An Appliance-level Analysis of Small Business Behavior under Dynamic Prices," NBER Working Papers 27263, National Bureau of Economic Research, Inc.

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    More about this item

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • L98 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Government Policy
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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