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Incentive-Based Pay and Building Decarbonization: Experimental Evidence from the Weatherization Assistance Program

Author

Listed:
  • Peter Christensen
  • Paul Francisco
  • Erica Myers

Abstract

Building energy efficiency is a cornerstone of greenhouse gas mitigation strategies with billions of dollars set aside for extensive upgrades in the coming years. However, impact evaluations have revealed actual energy savings from home upgrade programs often fall short of projections, in part due to contractor underperformance. Using field experiment results, we show refining one program design element—offering performance bonuses to contractors— increased natural gas savings by 24% and generated $5.39-$14.53 in social benefits per dollar invested. Hence, changes to worker incentives can have sizable impacts on the cost effectiveness of GhG abatement in energy efficiency programs.

Suggested Citation

  • Peter Christensen & Paul Francisco & Erica Myers, 2023. "Incentive-Based Pay and Building Decarbonization: Experimental Evidence from the Weatherization Assistance Program," NBER Working Papers 31322, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:31322
    Note: EEE LS PE
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    More about this item

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • J0 - Labor and Demographic Economics - - General
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General

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