Energy Efficiency Research Design Competition
"Water-Based Behavioral Interventions and Energy Efficiency Investments"
Gabriel Lade (Iowa State University), Katrina Jessoe (University of California, Davis), and Edward Spang (University of California, Davis)
Behavioral nudges are increasingly used by utility companies to reduce residential water and energy demand. We have designed an experiment to understand if these types of interventions spillover into unintended sectors, leading to additional conservation. In partnership with a municipal utility supplying water and electricity, a natural gas company, and a water messaging company, we have deployed a field experiment to test the effect of social norms messaging about residential water usage on residential water and energy consumption. Preliminary results suggest that water conservation messaging leads to 2-3.5 percent reduction in water usage and a 1.5 to 2 percent reduction in electricity usage, where the latter effect is most pronounced between the peak hours of 4 and 8 pm. Post-intervention surveys and data on the uptake of energy and water efficiency rebates will allow us to gain insight into the channels explaining the reduction in water and energy usage.
"Salience of the Energy-Efficiency Trade-Off and the Purchase of Energy Efficient Appliances"
Giovanna d'Adda (Milan Polytechnic) and Yu Gao (Milan Polytechnic)
Using a Randomized Control Trial with an online retailer of household appliances, we investigate how provision of information on the upfront costs and energy savings from devices, and manipulation of the salience of such information, influence uptake of energy efficient products. The experimental design tests the prediction of theoretical models of salience that cognitive biases are behind low uptake of energy efficient devices, characterized by higher prices concentrated at the time of purchase and benefits accruing slowly over time. We vary the salience of costs and benefits by displaying them graphically, by manipulating the level of aggregation, at which they are displayed, and by making payment in instalments available to customers. We use data on sales to evaluate whether the provision and salience of information lead to higher purchases of energy efficient devices.
"Trust and the Purchase of Energy-Efficient Durable Goods: Evidence from Cooking Stoves in India"
Prabhat Barnwal (Michigan State University), Nicholas Ryan (Yale University), and Anant Sudarshan (Energy Policy Institute at the University of Chicago—India)
Energy policy tries to raise adoption of efficient products through information, standards, subsidies and other interventions in the markets for energy-using durables. Though these policies are widespread, their basic premise that poor or asymmetric information limits demand for efficiency is not well-tested. This project will test this assumption with a large-scale, market-level randomized-controlled trial of the star-rating label program for gas stoves in India. An existing, funded RCT will compare consumer purchase response to efficiency labeling to the response to price discounts, in order to quantify the value of information in shifting demand for efficiency. This proposal requests funding for innovative data collection to understand the process of consumer decision-making, in the rare context of this experiment, in greater depth. In particular, we will test how behavioral demand and supply factors shape consumer choice. On the demand side, we will conduct Implicit Association Tests (IAT) to measure how trust in government institutions mediates the consumer response to labeling and hence the demand for efficiency. On the supply side, we will audit stove sellers to measure how margins affect customer steering towards more or less efficient models. This study will generate empirical insights on whether and how informational programs increase energy-efficiency.