NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

The Lightbulb Paradox: Evidence from Two Randomized Experiments

Hunt Allcott, Dmitry Taubinsky

NBER Working Paper No. 19713
Issued in December 2013
NBER Program(s):   EEE   PE

Imperfect information and inattention to energy costs are important potential justifications for energy efficiency standards and subsidies. We evaluate these policies in the lightbulb market using a theoretical model and two randomized experiments. We derive welfare effects as functions of reduced-form sufficient statistics capturing economic and psychological parameters, which we estimate using a novel within-subject information disclosure experiment. In the context of the model, the main results suggest that moderate subsidies for energy efficient lightbulbs may increase welfare, but informational and attentional biases alone do not justify a ban on incandescent lightbulbs.

download in pdf format
   (1245 K)

email paper

Supplementary materials for this paper:

This paper was revised on August 5, 2014

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w19713

Published: Evaluating Behaviorally Motivated Policy: Experimental Evidence from the Lightbulb Market Hunt Allcott Dmitry Taubinsky AMERICAN ECONOMIC REVIEW VOL. 105, NO. 8, AUGUST 2015 (pp. 2501-38)

Users who downloaded this paper also downloaded these:
Davis w19736 The Economic Cost of Global Fuel Subsidies
Metcalf w19729 The Economics of Energy Security
Allcott, Mullainathan, and Taubinsky w17977 Energy Policy with Externalities and Internalities
Gilbert and Graff Zivin w19510 Dynamic Salience with Intermittent Billing: Evidence from Smart Electricity Meters
Bloom w19714 Fluctuations in Uncertainty
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us