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Experimental evidence from energy conservation programs.

In 2008, one electric utility implemented a program in which it randomly selected about 43,000 of its household customers to receive "Home Energy Reports" which feature personalized feedback, social comparisons, and energy conservation information. About a quarter of that sample group was randomly selected to no longer receive those reports after two years. In The Short-Run and Long-run Effects of Behavioral Interventions: Experimental Evidence from Energy Conservation (NBER Working Paper No. 18492), Hunt Allcott and Todd Rogers analyze the short-term and long-term results of this program on energy conservation behavior.

They find that in the short run, there is a pattern of "action and backsliding." As the initial reports arrive, some consumers are immediately motivated to conserve. They adjust thermostats, turn off lights, and unplug unused electronics. However, those households soon begin to "backslide" toward their pre-intervention levels of energy use, at least until the arrival of subsequent reports, which induce at least some of these same households to conserve.

The authors find that the effects of this program are highly durable. As long as the reports continue to arrive over the third and fourth years, the households receiving them continue to incrementally reduce their energy use. Even for households dropped from the program after year two, about two-thirds of the effect on conservation remains two years later. At the end of four years, the average household that was still receiving reports was taking actions equivalent to turning off a standard 60-watt light bulb for about 11 hours each day; the average household dropped from the program was still taking actions equivalent to turning off that light bulb for 7.5 hours each day.

However, the evidence from this experimental program suggests that the households that continued to receive reports were no more inclined than households in the control group (no reports) to invest in physical capital, such as energy efficient appliances or insulation. Based on self-reported data on actions taken to conserve energy, it would seem that the program does not significantly induce households to adopt new energy habits, but instead might motivate households to do more of the same things that they were already doing to reduce energy consumption. The authors conclude that it is important to repeat an intervention until participants have developed a new "capital stock" of habits or other technologies.

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Author:Brunel, Claire
Publication:The NBER Digest
Date:Mar 1, 2013
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