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Journal ArticleDOI

Evidence from Two Large Field Experiments that Peer Comparison Feedback Can Reduce Residential Energy Usage

01 Oct 2013-Journal of Law Economics & Organization (Oxford University Press)-Vol. 29, Iss: 5, pp 992-1022
TL;DR: Ayres et al. as discussed by the authors showed that feedback from peers can reduce the usage of residential energy in the United States by reducing the use of coal and natural gas in the US.
Abstract: NBER WORKING PAPER SERIESEVIDENCE FROM TWO LARGE FIELD EXPERIMENTS THAT PEER COMPARISONFEEDBACK CAN REDUCE RESIDENTIAL ENERGY USAGEIan AyresSophie RasemanAlice ShihWorking Paper 15386http://www.nber.org/papers/w15386NATIONAL BUREAU OF ECONOMIC RESEARCH1050 Massachusetts AvenueCambridge, MA 02138September 2009Special thanks to Tyler Curtis and Alex Laskey from Positive Energy/oPower for contributing criticismto earlier drafts. The views expressed herein are those of the author(s) and do not necessarily reflectthe views of the National Bureau of Economic Research.© 2009 by Ian Ayres, Sophie Raseman, and Alice Shih. All rights reserved. Short sections of text,not to exceed two paragraphs, may be quoted without explicit permission provided that full credit,including © notice, is given to the source.

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Citations
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Journal ArticleDOI
TL;DR: In this paper, the authors show that initial reports cause high-frequency "action and backsliding", but these cycles attenuate over time. And if reports are discontinued after two years, effects are relatively persistent, decaying at 10-20 percent per year.
Abstract: We document three remarkable features of the Opower program, in which social comparison-based home energy reports are repeatedly mailed to more than six million households nationwide. First, initial reports cause high-frequency “action and backsliding,” but these cycles attenuate over time. Second, if reports are discontinued after two years, effects are relatively persistent, decaying at 10–20 percent per year. Third, consumers are slow to habituate: they continue to respond to repeated treatment even after two years. We show that the previous conservative assumptions about post-intervention persistence had dramatically understated cost effectiveness and illustrate how empirical estimates can optimize program design.(JEL D12, D83, L94, Q41)

999 citations

Journal ArticleDOI
TL;DR: In this paper, the key cognitive biases and motivational factors that may explain why energy-related behavior so often fails to align with either the personal values or material interests of consumers are explored.
Abstract: Household energy conservation has emerged as a major challenge and opportunity for researchers, practitioners and policymakers. Consumers also seem to be gaining greater awareness of the value and need for sustainable energy practices, particularly amid growing public concerns over greenhouse gas emissions and climate change. Yet even with adequate knowledge of how to save energy and a professed desire to do so, many consumers still fail to take noticeable steps towards energy efficiency and conservation. There is often a sizeable discrepancy between peoples’ self-reported knowledge, values, attitudes and intentions, and their observable behaviour—examples include the well-known ‘knowledge-action gap’ and ‘value-action gap’. But neither is household energy consumption driven primarily by financial incentives and the rational pursuit of material interests. In fact, people sometimes respond in unexpected and undesirable ways to rewards and sanctions intended to shift consumers’ cost–benefit calculus in favour of sustainable behaviours. Why is this so? Why is household energy consumption and conservation difficult to predict from either core values or material interests? By drawing on critical insights from behavioural economics and psychology, we illuminate the key cognitive biases and motivational factors that may explain why energy-related behaviour so often fails to align with either the personal values or material interests of consumers. Understanding these psychological phenomena can make household and community responses to public policy interventions less surprising, and in parallel, can help us design more cost-effective and mass-scalable behavioural solutions to encourage renewable and sustainable energy use among consumers.

655 citations

Journal ArticleDOI
TL;DR: In this paper, the authors review explanations for an energy efficiency gap, including reasons why the size of the gap may be overstated, neoclassical explanations for a gap, and recent evidence from behavioral economics that has potential to help us understand why a gap could exist.
Abstract: Despite several decades of government policies to promote energy efficiency, estimates of the costs and benefits of such policies remain controversial. At the heart of the controversy is whether there is an "energy efficiency gap," whereby consumers and firms fail to make seemingly positive net present value energy saving investments. High implicit discount rates, undervaluation of future fuel savings, and negative cost energy efficiency measures have all been discussed as evidence of the existence of a gap. We review explanations for an energy efficiency gap, including reasons why the size of the gap may be overstated, neoclassical explanations for a gap, and recent evidence from behavioral economics that has potential to help us understand why a gap could exist. Our review raises fundamental questions about traditional welfare analysis, yet we find the alternatives offered in the literature to be far from ready for use in policy analysis. Nevertheless, we offer several suggestions for policymakers and for future economic research.

529 citations

Journal ArticleDOI
TL;DR: In this paper, the authors analyze the extent to which the use of gas and electricity is determined by the technical specifications of the dwelling as compared to the demographic characteristics of the residents, and they find that even absent price increases for residential energy, the aging of the population and their increasing wealth will roughly offset improvements in the building stock resulting from policy interventions and natural revitalization.

508 citations

Journal ArticleDOI
TL;DR: In this paper, two relatively simple and easy-to-implement interventions were evaluated in a workplace setting during the fall of 2008 and found that feedback and peer education resulted in a 7% and 4% reduction in energy use, respectively.

436 citations

References
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Journal ArticleDOI
TL;DR: This review covers recent developments in the social influence literature, focusing primarily on compliance and conformity research published between 1997 and 2002, and emphasizes the ways in which these goals interact with external forces to engender social influence processes that are subtle, indirect, and outside of awareness.
Abstract: This review covers recent developments in the social influence literature, focusing primarily on compliance and conformity research published between 1997 and 2002. The principles and processes underlying a target's susceptibility to outside influences are considered in light of three goals fundamental to rewarding human functioning. Specifically, targets are motivated to form accurate perceptions of reality and react accordingly, to develop and preserve meaningful social relationships, and to maintain a favorable self-concept. Consistent with the current movement in compliance and conformity research, this review emphasizes the ways in which these goals interact with external forces to engender social influence processes that are subtle, indirect, and outside of awareness.

4,223 citations

Journal ArticleDOI
TL;DR: A field experiment in which normative messages were used to promote household energy conservation, offering an explanation for the mixed success of persuasive appeals based on social norms and suggesting how such appeals should be properly crafted.
Abstract: Despite a long tradition of effectiveness in laboratory tests, normative messages have had mixed success in changing behavior in field contexts, with some studies showing boomerang effects. To test a theoretical account of this inconsistency, we conducted a field exper- iment in which normative messages were used to promote householdenergyconservation.Aspredicted,adescriptive normative message detailing average neighborhood usage produced either desirable energy savings or the undesir- able boomerang effect, depending on whether households were already consuming at a low or high rate. Also as predicted, adding an injunctive message (conveying social approval or disapproval) eliminated the boomerang effect. The results offer an explanation for the mixed success of persuasive appeals based on social norms and suggest how such appeals should be properly crafted.

2,987 citations

Journal ArticleDOI
TL;DR: This paper examined the effectiveness of signs requesting hotel guests' participation in an environmental conservation program and found that normative appeals were more effective when describing group behavior that occurred in the setting that most closely matched individuals' immediate situational circumstances, referred to as provincial norms.
Abstract: Two field experiments examined the effectiveness of signs requesting hotel guests’ participation in an environmental conservation program. Appeals employing descriptive norms (e.g., “the majority of guests reuse their towels”) proved superior to a traditional appeal widely used by hotels that focused solely on environmental protection. Moreover, normative appeals were most effective when describing group behavior that occurred in the setting that most closely matched individuals’ immediate situational circumstances (e.g., “the majority of guests in this room reuse their towels”), which we refer to as provincial norms. Theoretical and practical implications for managing proenvironmental efforts are discussed.

2,514 citations

Journal ArticleDOI
TL;DR: In this paper, the authors reviewed and evaluated the effectiveness of interventions aiming to encourage households to reduce energy consumption by changing individual knowledge and perceptions rather than changing contextual factors (i.e., pay-off structure) which may determine households' behavioral decisions.

2,453 citations

Book ChapterDOI
TL;DR: This chapter discusses those injunctive social norms—once activated—is likely to lead to beneficial social conduct across the greatest number of situations and populations.
Abstract: Publisher Summary This chapter focuses on norms, which can be demonstrated to affect human action systematically and powerfully. Three distinct types of norms that are effective: social norms of the descriptive kind, which guides the behavior via the perception of how most others would behave; social norms of the injunctive kind, which guides the behavior via the perception of how most others would approve/disapprove of a person's conduct; and personal norms, which guides the behavior via the perception of how a person would approve/disapprove of his own conduct. At a given time, an individual's actions are likely to conform to the dictates of the type of norm that are familiar even when the other types of norms dictate contrary conduct. The chapter discusses those injunctive social norms—once activated—is likely to lead to beneficial social conduct across the greatest number of situations and populations. By focusing subjects on one or another type of norm, the action of a particular kind of norm was stimulated, without activating the other kinds.

2,322 citations