The Short-Run and Long-Run Effects of Behavioral Interventions: Experimental Evidence from Energy Conservation

Hunt Allcott, Todd Rogers

NBER Working Paper No. 18492
Issued in October 2012
NBER Program(s):   EEE

While interventions to affect smoking, exercise, and other behaviors sometimes have short-run impacts, there is limited evidence on long-run effects. We study the three longest-running sites of the Opower energy conservation program, in which home energy reports with social comparisons and energy conservation tips are repeatedly mailed to more than six million households nationwide. At first, there is a pattern of "action and backsliding": the reports cue immediate conservation, but consumers' initial efforts begin to decay within less than two weeks. As more reports are delivered, this high-frequency cycling attenuates. In the long-run, consumers form a new stock of physical capital or consumption habits: if reports are discontinued after two years, the effects are much more persistent than they had been between the initial reports. Remarkably, however, consumers do not fully habituate: they still respond substantially if treatment is continued after two years. We show that the previous conservative assumptions about long-run persistence had dramatically understated cost effectiveness, and we illustrate how estimates of persistence and habituation can be used to optimize program design.

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This paper was revised on October 2, 2013

Acknowledgments

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