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Do Social Norms Matter to Energy Saving Behavior? Endogenous Social and Correlated Effects

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  • Toshi H. Arimura
  • Hajime Katayama
  • Mari Sakudo

Abstract

Social norms have received growing attention as a potential driver for pro-environmental behavior, partly due to ample evidence based on survey data. Using data from a Japanese household survey on energy saving behavior, we estimate a structural model of social interactions that account for methodological issues inherent in survey data, namely: simultaneity, common shocks and nonrandom group selection. We find that the influence of social norms on energy saving behavior is small or insignificant, while estimates from standard methods in the literature are found to be large and highly significant. Our results suggest that evidence in previous survey-based studies may reflect correlation in unobserved characteristics between members in a group, not the influence of social norms.

Suggested Citation

  • Toshi H. Arimura & Hajime Katayama & Mari Sakudo, 2014. "Do Social Norms Matter to Energy Saving Behavior? Endogenous Social and Correlated Effects," Working Papers e76, Tokyo Center for Economic Research.
  • Handle: RePEc:tcr:wpaper:e76
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    References listed on IDEAS

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    1. Nyborg, Karine & Howarth, Richard B. & Brekke, Kjell Arne, 2006. "Green consumers and public policy: On socially contingent moral motivation," Resource and Energy Economics, Elsevier, vol. 28(4), pages 351-366, November.
    2. Joseph G. Altonji & Todd E. Elder & Christopher R. Taber, 2005. "Selection on Observed and Unobserved Variables: Assessing the Effectiveness of Catholic Schools," Journal of Political Economy, University of Chicago Press, vol. 113(1), pages 151-184, February.
    3. Charles F. Manski, 1993. "Identification of Endogenous Social Effects: The Reflection Problem," Review of Economic Studies, Oxford University Press, vol. 60(3), pages 531-542.
    4. Ek, Kristina & Söderholm, Patrik, 2008. "Norms and economic motivation in the Swedish green electricity market," Ecological Economics, Elsevier, vol. 68(1-2), pages 169-182, December.
    5. Krauth, Brian V., 2006. "Simulation-based estimation of peer effects," Journal of Econometrics, Elsevier, vol. 133(1), pages 243-271, July.
    6. Charles F. Manski, 2000. "Economic Analysis of Social Interactions," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 115-136, Summer.
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