TY - JOUR AU - Jacobsen,Grant D. AU - Kotchen,Matthew J. AU - Vandenbergh,Michael P. TI - The Behavioral Response to Voluntary Provision of an Environmental Public Good: Evidence from Residential Electricity Demand JF - National Bureau of Economic Research Working Paper Series VL - No. 16608 PY - 2010 Y2 - December 2010 UR - http://www.nber.org/papers/w16608 L1 - http://www.nber.org/papers/w16608.pdf N1 - Author contact info: Grant Jacobsen Department of Planning, Public Policy, and Management 1209 University of Oregon 119 Hendricks Hall Eugene, OR 97403 Tel: 541-346-3419 Fax: 541-346-2040 E-Mail: gdjaco@uoregon.edu Matthew Kotchen School of Forestry & Environmental Studies, School of Management, and Department of Economics Yale University 195 Prospect Street New Haven, CT 06511 Tel: 203/432-9533 Fax: 203/436-9150 E-Mail: matthew.kotchen@yale.edu Michael Vandenbergh Vanderbilt University Law School 131 21st Avenue South Nashville, TN 37203 E-Mail: michael.vandenbergh@vanderbilt.edu M2 - featured in NBER digest on 2011-06-01 AB - This paper develops a theory of voluntary provision of a public good in which a household’s decision to engage in a form of environmentally friendly behavior is based on the desire to offset another behavior that is environmentally harmful. The model generates predictions about (1) participation in a green-electricity program at the extensive and intensive margins, and (2) changes in electricity consumption in response to participation. We test the theory using billing data for participants and nonparticipants in a green-electricity program in Memphis, Tennessee. High-consumption households are more likely to participate, and they participate at higher levels. In terms of a behavioral response, households participating above the minimum threshold level do not change electricity consumption, but those participating at the minimum threshold increase electricity consumption 2.5 percent after enrolling in the program. The result is based on identification strategies that exploit before-after differences between participants and nonparticipants, and differences in the timing of enrollment among participants only. Despite the increase in electricity demand upon the purchase of green electricity for the households with a “buy-in” mentality, the net effect for the buy-in households is a reduction in pollution emissions, as the behavioral response is not large enough to offset the environmental benefit of the green-electricity purchase. ER -