Showing papers on "Consumption (economics) published in 1980"

The Sensitivity of Consumption to Transitory Income: Estimates from Panel Data on Households

Abstract: We investigate the stochastic relation between income and consumption (specifically, consumption of food) within a panel of about 2,000 households. Our major findings are: 1. Consumption responds much more strongly to permanent than to transitory movements of income. 2. The response to transitory income is nonetheless clearly positive. 3. A simple test, independent of our model of consumption, rejects a central implication of the pure life cycle-permanent income hypothesis. The observed covariation of income and consumption is compatible with pure life cycle-permanent income behavior on the part of80 percent of families and simple proportionality of consumption and income among the remaining 20 percent. As a general matter, our findings support the view that families respond differently to different sources of income variations. In particular, temporary income tax policies have smaller effects on consumption than do other, more permanent changes in income of the same magnitude.

Econometric Models for Probabilistic Choice Among Products

Abstract: I understand the discipline of marketing exists to answer questions such as: "Will housepersons buy more Brand A soap if its perfume content is increased?" Traditional econometric demand analysis provides no answer. Its attention has been concentrated on consumption levels of broad commodity classes (e.g., housing services), examined using aggregate market data, with demand models constructed on the twin pillars of economic rationality and consumer sovereignty. The market researcher has understandably looked elsewhere-to psychology and survey research-for answers to his questions. Realities have forced econometric demand analysts to broaden their perspective. Public intervention in the supply of some commodities, notably in the areas of transportation, energy, and communications, have required economists to recognize the marketing considerations implicit in issues of policy. (The decision of whether to build and how to design a public This paper reviews several recent developments in econometric demand analysis which may be of interest in market research. Econometric models of probabilistic choice, suitable for forecasting choice among existing or new brands, or switching between brands, are surveyed. These models incorporate attribute descriptions of commodities, making them statistical counterparts of the Court-GrilichesLancaster theory of consumer behavior. Particular attention is given to models which yield tree structures of similarities between alternatives. Also reviewed are methods for estimating econometric models of probabilistic choice from "point-ofsale" sample surveys. * Prepared for presentation at the Conference on Interfaces between Marketing and Economics, Graduate School of Management, University of Rochester, April 7, 1978. Research was supported in part by the National Science Foundation through grant SOC75-22657 to the University of California, Berkeley. Portions of this paper were written while the author was an Irving Fisher Visiting Professor of Economics at the Cowles Foundation for Research in Economics, Yale University.

Advertising and Aggregate Consumption: An Analysis of Causality

Abstract: This paper is concerned with testing for causation, using the Granger definition, in a bivariate time-series context. It is argued that a sound and natural approach to such tests must rely primarily on the out-of-sample forecasting performance of models relating the original (non-prewhitened) series of interest. A specific technique of this sort is presented and employed to investigate the relation between aggregate advertising and aggregate consumption spending. The null hypothesis that advertising does not cause consumption cannot be rejected, but some evidence suggesting that consumption may cause advertising is presented.

On the Long-Run Steady State in a Simple Dynamic Model of Equilibrium with Heterogeneous Households

Abstract: This paper examines the long-run behavior of a one-good model of dynamic equilibrium with heterogeneous households.1 The main result is a characterization of the long-run steady state that verifies a conjecture of Ramsey [1928].2 If an agent's lifetime utility function over an infinite horizon is represented by a stationary, additive, discounted function with a constant pure rate of time preference, then the income distribution is shown in the long-run steady state to be determined by the lowest discount rate. The household with the lowest rate of discount owns all the capital and earns a wage income; all other households receive a wage income. If discount rates are equal between households, than the steady state distribution of income is indeterminate. Rader [1979] shows the emergence of a dominant consumer in the long run for a model without an explicit capital accumulation structure. The dominant consumer has the lowest pure rate of time preference in the economy. Advantages of our work over Rader's presentation are that the analysis is related to the theory of economic growth and the mathematics is elementary. One difference from the Rader result is that nondominant consumers have positive steady state consumption. Normally, those with high discount rates would want to contract to trade future labor for present consumption. These agents would then incur a debt equal to the discounted value of their wage income. Rader's result admits intertemporal trades of future labor for current consumption in a loan market extending into the indefinite future. Each consumer's budget constraint requires total assets to be

Taxation, Human Capital, and Uncertainty

Abstract: This paper analyzes the effect of wage and interest taxation on investment in human capital. It is shown that results derived under the assumption that human.capital is a riskless asset fail to obtain when the return on human capi- tal is uncertain. The interaction of the human capital investment decision with savings, consumption and labor-leisure choices are taken into account. An implication of the analysis is that, when the rate of return on human capi- tal is stochastic, efficient taxation requires positive taxation of wage income even when lump-sum taxation is feasible. (This abstract was borrowed from another version of this item.)

Addiction and backsliding: A theory of compulsive consumption

Abstract: A time-specific model of compulsive consumption incorporates the two central characteristics of addiction: that people get hooked through use of addictive commodities and that people often are of two minds, simultaneously wanting to consume an addictive commodity and to avoid it. The paper demonstrates the importance of modeling that stable and bounded human non-constancy that is ruled out by orthodox equilibrium analysis: it induces ‘anti-market’ selling consumption avoidance; it creates consumer conflict and the need for self-control; it implies the possible welfare superiority of blind hedonism over expected utility maximization.

The Demand for Life Insurance: An Application of the Economics of Uncertainty

Abstract: Financial economists typically assume that capital income uncertainty, derived from investments in uncertain returned marketable securities, represents the major source of household consumption uncertainty. But, for many households, if not most, labor income uncertainty dominates capital income uncertainty. This study analyzes households optimal reactions to labor income (human capital) uncertainty that is derived from the possibility of their wage earners' non-survival. By introducing a risk resolution mechanism-an insurance market-and allowing for the possibility that future tastes may be state-dependent, simple demand-for-insurance equations are mathematically derived to explicitly describe households optimal responses to human capital uncertainty. THIS PAPER ANALYZES A problem of consumer choice in an environment of uncertainty. In dealing with consumer choice, one has a rather wide latitude in the specification of the assumed source of uncertainty and the object of consumer choice. For example, as Merton [20] points out, the most common sources of consumer uncertainty might include: * uncertainty about the future inflows of household income derived from investing in marketable assets (uncertain capital income), * uncertainty about the future inflows of household income derived from the wage earner's labor input (uncertain labor income), * uncertainty about the future age of death, * uncertainty about the future investment opportunity set, * uncertainty about future relative prices of consumption goods, the types of consumption goods available in the future, and future tastes. While various combinations of these sources of uncertainty have been analyzed in the past, the investigation of household capital income uncertainty, derived from investments in uncertain returned marketable securities, has received the

Home Production--A Forgotten Industry

Abstract: RECENT years have witnessed an awakened interest in the economic activity taking place outside the market, and in particular the activity taking place at home. This interest spurred by the new consumption theory of Becker and Lancaster and by the estimates of the Measure of Economic Welfare of Nordhaus and Tobin (1973) has taken two distinct forms: an increased number of studies on the economics of household behavior and a renewed effort to place a money value on the household home activity. However, while the major thrust of the first type of studies is in the field of microeconomics, the estimates of home production refer, in general, to the economy as a whole. These estimates, crude as they are, indicate that home production is far from being a negligible part of the economic activity. Even in an advanced economy such as the United States the value added generated by the home sector seems to account for over one third of the output produced at the market (Hawrylyshyn, 1976). In less advanced economies this fraction is presumably even higher. It seems, therefore, of interest to repeat the question in a microeconomic context and examine the role of home production at the household level, rather than in the aggregate. In contrast to past studies which have focused on the labor inputs going into home production (Sirageldin, 1969; Walker and Gauger, 1973), the emphasis in this paper is on the measurement of productivity and total home output. The questions I try to answer are: What are the factors determining the wife's productivity at home? What is the value of home production and how does it compare with the family's money income? How does the value of home production differ among families with different socioeconomic backgrounds? How is it affected by the wife's labor force participation and by the existence of young children? How does it change over the family's life cycle? It is found that the value of home production associated with the work at home of U.S. wives in 1973 exceeded 60% of the family's money income before taxes, and 70% of the family's money income after taxes. It was lower for families with no preschool children and almost equal to the family's money income after taxes when the family had young children. Home productivity increases with education but at a lower rate than market productivity. Home production is only slightly affected by the wife's employment in the market when the family does not have young children. However, when the family has young children, the loss of home output when the wife joins the labor force equals almost her increased money earnings. Finally, home production tends to peak at a younger age (35-39) than money income and drops significantly thereafter. The paper opens with a discussion of the estimation of household productivity-the model, the data and the estimates. The role home output plays in comparison with other material resources is discussed in section III. The paper closes with some concluding remarks.

The Impact of Women's Time Allocation on Expenditure for Meals Away from Home and Prepared Foods

Abstract: consequences for food preparation and consumption, because food preparation accounts for much of the time spent in household production. Despite changing sex roles, women still make most of the food-related decisions and perform much of the food selection and preparation activities. Therefore, a household's expenditure on ready-prepared foods and meals consumed away from home, as requiring the least amount of homemaker's time, should be inversely related to the amount of a woman's time allocated to household production and to those factors affecting such allocation. The purpose of this article is to test the hypotheses advanced by Gronau, who extended Becker's time-allocation analysis to a woman's household labor time versus leisure time versus market labor

A Proposed Paradigm for Consumer Product Disposition Processes

Abstract: The study of consumer behavior has dealt largely with acquisition and consumption. Very little attention has been given to a third stage-disposition. This paper presents a paradigm of consumer product disposition processes. The paradigm shows the person, product and situation as components influencing the disposition process.

Unbalanced Growth and the Demand for Performing Arts: An Econometric Analysis

Abstract: The prevailing proposition in the economic analysis of the performing arts ever since the work of Baumol and Bowen [3; 4] has been the view that "there are fundamental reasons to expect the financial strains which beset the performing arts to increase, chronically, with the passage of time" [3, 499]. The "fundamental reasons" refer to the application of Baumol's [1] unbalanced growth model to the case of live performing arts. The argument from the unbalanced growth model is that manufacturing productivity growth increases the general level of wages and so imposes cost pressure in such labour-intensive and limited productivity-increase areas as the performing arts. This finding, say Baumol and Bowen, can hardly "be reassuring to those to whom ready availability of the arts constitutes an important objective of society" [3, 502]. But whether pessimism is justified is not at all clear. Economic prospects for the performing arts depend upon demand influences as well as cost factors, and there is no real analysis of demand in the unbalanced growth model. This omission is important because there are two highly relevant demand effects implied by the assumptions of the unbalanced growth model itself. Specifically, an increasing general wage level while putting cost pressure on the performing arts, also provides increased income from which increased arts expenditure can be made. This effect of wages on demand is neglected in the unbalanced growth model and yet it is potentially significant because this particular price change represents a change in income itself and is not just a change in the price of a consumer good which is a small part of the budget.' At the same time the wage effect on arts demand cannot be automatically presumed large, even with pure income effects substantial and performing arts not likely to be an inferior good. This is because, following Becker [6] and Linder [12], we must recognise that the increase in wages which is at the heart of the analysis through its effect on relative costs and on income, also implies a change in the price of consumption time and hence an incentive to shift away from time-intensive consumption activities.2 Since performing arts is an activity that is relatively time-intensive in consumption and which offers only limited opportunity for

The Regional Distribution of Population, Migration, and Climate

Abstract: Regional migration is analyzed utilizing a model that develops a system of urban areas. The areas differ in their endowment of a site-specific factor--climate is used as the example. The effects of differences in tax rates and technology are determined in a model where the price of housing is endogenous. Compensation for an inferior climate occurs through regional differences in income levels or the price of housing dependent on the manner in which climate affects production or consumption. The market distribution of households is found to be suboptimal in cases where utility is derived directly from the consumption of climate. (EXCERPT)

Evidence of fiscal differentials and intrametropolitan firm relocation.

Abstract: significant impact on intraurban business location decisions. However, he also notes that intrametropolitan property tax differentials may equal as much as 10% of a firm's profits. In these cases, one might expect that fiscal variables would affect the intraurban location decision of firms. Oakland also suggests that most studies which have examined intraurban industry location have inappropriately treated the firm's business location decision only from the demand side. Specifically, the firm's demand for space or site choice is presumed to be unrestricted by zoning or other exclusionary practices of local governments. Recent research by Fischel (1975) and Fox (1978) suggests that some local governments rationally exclude firms from locating within their boundaries or supply no industry sites. They argue that residents of communities derive utility from environmental quality, public goods and private goods. The presence of industry in a jurisdiction presumably leads to more increases in tax revenues than in expenditures, and the presence of industry permits the consumption of more local public and private goods at the expense of environmental quality. Communities with stronger preferences for environmental quality will require higher ax revenues from firms or larger increases in private and public goods in order to accept losses in environmental quality. Some communities with very strong preferences for environmental quality may want to increase their property tax rate on firms to adequately compensate them for losses of environmental quality. However, since the property tax rate must be applied uniformly to residential and nonresidential property, residents are essentially constrained to trade increased public goods for losses in environmental quality and losses in private consumption. If communities find either of these tradeoffs unacceptable, then they are likely to zone very little or no land for industrial and commercial use. Thus, Oakland argues, the inclusion of communities that zoneout firms in an analysis of firm site choice ma lead to biased estimation results, especially with regard to fiscal variables. A complete analysis of the location of firms should be based on a demand for

Advertising and Welfare: Comment

Abstract: In an earlier article Dixit and Norman studied the welfare effects of advertising. They came to the surprising conclusion that, even accepting postadvertising tastes as the welfare standard, monopoly advertising which raises price is excessive. The point of this comment is to show how and why their analysis fails to apply to the case where there is more than one consumer. Their analysis assumes that preadvertising consumption is distributed efficiently according to postadvertising tastes. Since this is not generally the case, there are gains to advertising ignored by Dixit and Norman.

The Sensitivity of Consumption to Transitory Income: Estimates from Panel Data on Households

Abstract: We investigate the stochastic relation between income and consumption (specifically, consumption of food) within a panel of about 2,000 households. Our major findings are: 1. Consumption responds much more strongly to permanent than to transitory movements of income. 2. The response to transitory income is nonetheless clearly positive. 3. A simple test, independent of our model of consumption, rejects a central implication of the pure life cycle-permanent income hypothesis. The observed covariation of income and consumption is compatible with pure life cycle-permanent income behavior on the part of80 percent of families and simple proportionality of consumption and income among the remaining 20 percent. As a general matter, our findings support the view that families respond differently to different sources of income variations. In particular, temporary income tax policies have smaller effects on consumption than do other, more permanent changes in income of the same magnitude.

Savings and Taxation

Abstract: In section 1.2 we shall examine the optimal taxation of capital and labor incomes in a simple growth model and derive formulae for the optimal tax rates. These are used in section 1.3 to evaluate claims that abolishing capital income taxes would lead to large welfare gains. Inflation is introduced in section 1.4, and alternative approaches to modeling savings behavior are discussed in section 1.5. Finally, we shall look briefly at some of the empirical evidence on the effects of taxes on savings. Our analysis will be highly simplified. We shall ignore many of the issues stressed by the Meade Committee, such as the complex interaction between personal and corporate taxation, the sheer diversity of tax rates currently imposed on different forms of saving, and the portfolio aspects of personal saving. The relationship between expenditure on durables and saving and the effect of social security on consumption will also be left to one side, and we shall say little about the production side of the economy. (For surveys of the effects of taxes on investment, see Helliwell, 1976; King, 1977; and von Furstenberg and Malkiel, 1977.) Despite these omissions the model captures the essential features necessary to an evaluation of the efficiency arguments.

Will Restrictions on Alcohol Advertising Reduce Alcohol Consumption

Abstract: Summary The effects of restrictions of alcohol advertisements in Manitoba, Canada and in the United States are examined using statistical data on alcohol consumption. The relationships between consumption and alcoholism rates for the U.S. and advertising regulations were very weak and not statistically significant. Subsequent to a restriction on beer advertising in Manitoba, beer consumption in that province rose at a similar rate as in a control province of Alberta. It is considered unlikely that restrictions on advertising will reduce consumption.

Age structure intergenerational transfers and economic growth: an overview.

Abstract: The economic implications of differences between stable age distributions are considered rather than the problem of fluctuations or the transition from 1 stable state to another. Over the past 25 years an increasing literature has focused on a theoretical level with this problem of comparative steady states and this discussion provides an analytical synthesis and critique of the literature with some generalizations and extensions. Attention is directed to the consumption-loan model models with capital (an identity for stable populations optimal saving and golden rule paths) and welfare optimal growth and optimal paths. When a population is able to consume only the direct rewards of its labor then the individual and the social budget constraints are the same and the rate of interest equals the population growth rate. The original condition stated--that the population consume only the direct rewards of its labor and therefore that aggregate consumption equal aggregate earnings--holds in both a consumption-loan economy (where there is no other income source) and in an economy with capital which is on a golden rule growth path in which case all income from capital is saved and thus unavailable for consumption. When the population growth rate changes the constraints linking consumption and output also change. From the societal perspective the relative numbers of recipients and donors of intergenerational transfers are altered. If an economy that accumulates capital is considered then a negative capital dilution effect is added to these age distribution-interest rate effects. The population must save at a higher rate to prevent the more rapid growth of the labor force from reducing the capital-labor rate and a lower capital-labor ratio will be optimal. This is the basic picture that emerges from the works of Samuelson Ohlin and Arthur-McNicoll. A couple of minor modifications have been added to this. The higher fertility required by more rapid population growth will also reduce labor supply and the household is a more natural unit of account than the individual.

The demand for life insurance

Abstract: This thesis is concerned with an examination of consumer purchases of life insurance. The problem is tackled in three main areas: first a theoretical examination of consumption, saving and bequest, based on the Yaari 'life-cycle' model of lifetime consumption. Secondly an analysis is developed to split new premium income into its two components: new savings and payments for protection against the financial effects of premature death. This analysis is then applied to the UK new business ordinary non-group renewable premium in order to derive figures for aggregate expenditure on savings-based and protection-based life insurance for the years 1946 to 1968. Thirdly, econometric techniques are applied to the aggregate data to explain the demand for both new and in force life insurance business: a study of the former is based on a single Demand and Supply model for new business (using the Two Stage Least Squares method); the analysis of contracts in force is undertaken by examining their Surrender Rates. The major concern of this thesis is to differentiate between the savings and protection elements of life insurance. The results in later chapters show that the demand for these elements is determined by different explanatory factors although some variables (notably permanent income) strongly influence both elements. Notably, Demand (in the form of premium expenditure) is not affected by market price in either the savings-based or the protection-based case (although the same cannot be said for supply). Attention is given to the role of inflationary expectations in the purchase of life insurance. Though the period under study was one of comparatively mild inflation, expectations are found to have a negative effect both on Demand and Supply and Surrender Rates: interesting conclusions can thus be drawn about the structure of long-term inflationary expectations.

Social Insurance and Consumption: An Empirical Inquiry

Abstract: The main stated purposes of social insurance programs have been the maintenance of consumption by people suffering from misfortunes, and the stabilization of employment. Despite this, most recent research on unemployment insurance (UI) and Old Age Insurance has focused on secondary labor-market effects, with only a few studies looking at stabilization, and none considering effects on consumption. In this study we examine how UI will affect the consumption of recipients. For some individuals UI will help remove the constraints on consumption during periods of reduced income that arise from insufficient savings and imperfect capital markets, while for others the UI benefits merely augment the entire lifetime consumption stream. The model enables us to estimate what fractions of the population fall into these two categories. If individuals are also constrained in the allocation of their reduction consumption, consumption propensities out of UI will differ from those out of nonrecipients' income. The model is tested on aggregate time-series data covering 41 consumption categories for 1959-1978:II, and on over 14,000 individuals from the 1972-73 Consumer Expenditure Survey. In both data sets we find no more than half of UI benefits are consumed as if the recipients' consumption were constrained during times of unemployment. In both samples spending out of UI benefits is disproportionately on luxuries, though UI recipients spend greater shares of their income on necessities. The results imply that a large part of social insurance payments does not go to prevent serious imbalances in individuals' lifetime consumption profiles.

Application of functional analysis to models of efficient allocation of economic resources

Abstract: The present paper studies existence and characterization of efficient paths in infinite-horizon economic growth models: the method used is based on techniques of nonlinear functional analysis on Hilbert spaces developed earlier by Chichilnisky. Necessary and sufficient conditions are given for the existence of positive competitive price systems in which the efficient programs maximize present value and intertemporal profit. Approximation of these competitive price systems by strictly positive ones with similar properties is studied. A complete characterization is also given f a class of welfare functions (nonlinear operators defined on consumption paths) for continuity in a weighted L2-norm.

Economics of energy

Abstract: The aim of this comprehensive textbook is to provide the student with an understanding of the economic issues involved in the formulation of energy policies. After an analysis of the statistical background of energy reserves, production, and consumption, it discussed optimal resource depletion and pricing policies. Environmental problems stemming from energy use are discussed in detail, and the role of the tax system in achieving specified objectives of policy is explored. The book also makes a particular study of the problem of uncertainty in energy planning and evaluates the uses and limitations of the technique of energy accounting. Although primarily concerned with the principles of the subject, it illustrates these with the appropriate empirical data. The book concludes with a description of recent energy policy in the United Kingdom and the United States. 395 refs, 27 figures, 28 tables.

Sharing the Same Table: Consumption and the Family*

Abstract: IF there is one universally recognised function of the family it is that of 'consumption'. It would be tedious to enumerate all the works which mention this because there is no sociologist, and more generally no author dealing with the family, who does not at least allude to it. Furthermore, it is presented as one of the principal functions of 'the Modern Family'. To say that the family assumes a function implies that it satisfies pre-existing needs, and this is certainly implied in the case of consumption. In the authors' minds, as in commonsense, this function answers not the social and contingent need of businesses to see their products sold, but (at least in earlier times) the universal needs of physical survival for human beings. It seems undeniable that primary needs are involved, that the satisfaction of these needs must be a preliminary to any social life, and that this function must consequently be of the very greatest importance. These needs are universal because they are biological and, since they are biological, they must be the needs of individuals in the sense of discrete, physical units. If it is granted that the family is the institution (or one of the institutions) which fulfills this function, it might have been expected that the next step would have been a study of the way in which the family satisfies these needs. But, in contrast to the social and theoretical importance of both the family and the 'function' of consumption, there is a strikingly poor literature on the topic. Not a single known study of the family takes this function as its theme of research, or even sets out the ground for such research. If this function were not the object of specific investigations, one might at least have expected to see it discussed in general theoretical introductions. But after its obligatory and quasiritual mention it is little developed. Indeed, the assertion of the existence of a consumption function is often put in the form of negatively phrased sentences. That is to say, the function of consumption is presented as the only remaining function of the family within the economic order: what remains to it of a glorious past, of the global economic role it used

Price distortions in developing countries: A bias against agriculture

Abstract: This article evaluates the effects of government intervention in agricultural commodity markets for a sample of developing countries. It also presents a review of the methodology for quantifying the effects of the distortions on prices, supply, demand, incomes, and foreign exchange. The empirical results indicate that the agricultural sector in developing countries is often heavily taxed. As a consequence, agricultural production is discouraged, while consumption is subsidized, and the increases in government revenue provided by taxation are counterbalanced by a loss of foreign exchange earnings.

The Existence of Efficient and Incentive Compatible Equilibria with Public Goods

Abstract: In our previous paper, "Optimal Allocation of Public Goods...," (1977) we presented a mechanism for determining efficient public goods allocations when preferences are unknown and consumers are free to misrepresent their demands for public goods. We proved the basic welfare theorem for this model: If consumers are competitive in markets for private goods and follow Nash behavior in their choice of demands to report to the mechanism, then equilibria will be Pareto optimal. In this paper we show this result is not vacuous by proving that an equilibria will be Pareto optimal. In this paper we show this result is not vacuous by proving that an equilibrium will exist for a wide class of economies. Our conditions are slightly stronger than those required to prove the existence of a Lindahl equilibrium. In order to rule out the possibility of bankruptcy, we assume additionally that at all Pareto optimal allocations, private goods consumption is bounded away from zero.

The Effect of Feedback and Social Reinforcement on Residential Electricity Consumption

Abstract: This experiment explored the effect of informational feedback in reducing electrical energy consumption with eleven matched quads of all-electric apartments in Port­ land, Oregon. Feedback about KWH usage was provided from electrical meter read­ ings during baseline, treatment and follow-up phases during the summer of 1977. Following a two week baseline period, apartments were exposed to one of the following conditions: (1) No treatment Control; (2) Daily Contingent Feedback, where informational feedback about KWH usage was provided on a daily basis; (3) Three Day Contingent Feedback Plus Decal, where feedback was provided every third day and commendation in the form of a decal was presented for reduced consumption; (4) Three Day Noncontingent Feedback Plus Decal, where feedback plus commendation were provided every third day, regardless of whether or not electricity consumption had decreased. Each of these feedback conditions had very little impact on electrical energy consumption during the two week treatment or the two week follow-up periods. These findings were viewed as consistent with other research which has also documented the limited impact of feedback on energy consumption. An analysis of the boundary conditions for the effectiveness of in­ formational feedback stimuli was presented. Recent articles in this journal [1-3] and elsewhere [see 4-6 for reviews of this work] have documented the results of recent psychological research on the nation's energy crisis. This research is based on the assumption that a significant amount of energy consumption stems from needless and excessive waste. Thus,