Harnessing Policy Complementarities to Conserve Energy: Evidence from a Natural Field Experiment

John A. List, Robert D. Metcalfe, Michael K. Price, Florian Rundhammer

NBER Working Paper No. 23355
Issued in April 2017
NBER Program(s):Environment and Energy Economics, Public Economics

The literature has shown the power of social norms to promote residential energy conservation, particularly among high usage users. This study uses a natural field experiment with nearly 200,000 US households to explore whether a financial rewards program can complement such approaches. We observe strong impacts of the program, particularly amongst low-usage and low-variance households, customers who typically are less responsive to normative messaging. Our data thus suggest important policy complementarities between behavioral and financial incentives: whereas non-pecuniary interventions disproportionately affect intense users, financial incentives are able to substantially affect the low-user, “sticky households.”

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Document Object Identifier (DOI): 10.3386/w23355

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