Hey, Big Saver? Exploring the Best Conditions to Facilitate Energy-Conservation Behaviour

Improving the efficiency with which people consume domestic energy has become a show-piece of how behavioural psychology can be applied to the field of environmental economics. This study builds upon the literature by providing subjects with energy performance information at group-level in a controlled field experiment setting. Its novelty is that it seeks to test the persistence of energy-saving habits, whether extrinsic incentives accentuate or crowd-out a motivation to save energy, and how heterogeneity in environmental attitudes impact upon action. Results suggest that providing relative information does stimulate energy-conserving behaviour, with this being most effective among those who held pre-trial preferences for sustainable living. However, the treatment variations indicate that subjects regularly fail to maintain ‘good habits’ once an intervention stops. Furthermore, we find evidence to imply that rewarding groups in this competitive environment may create perverse long-run effects. This has an important relevance for energy policy: whilst providing relative information could improve both consumer welfare and energy demand forecasting, the timescale, frequency and mechanism by which this is undertaken requires careful scrutiny and planning if these potential benefits are to be maximised and undesirable side effects prevented.