Asymmetric Effects of Non-Pecuniary Signals on Search and Purchase Behavior for Energy-Efficient Durable Goods

J. Scott Holladay, Jacob LaRiviere, David M. Novgorodsky, Michael Price

NBER Working Paper No. 22939
Issued in December 2016
NBER Program(s):Environment and Energy Economics, Industrial Organization, Public Economics

We report the results of a field experiment where we exogenously vary the use of social comparisons "nudges" and subsidies for participation in an in-home energy audit program, and follow subjects through to the subsequent purchase of durable goods. We therefore can compare the causal effect of financial incentives and nudges along two margins, audits, which we liken to search, and purchase of durables. Using data on nearly 100,000 households, we document an asymmetry; nudges increase audits, but lead to lower rates of purchase. We find no evidence of a differential response for those offered a financial incentive. These differences suggest heterogeneity in the motives of the marginal consumer induced by nudges versus prices.

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Document Object Identifier (DOI): 10.3386/w22939

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