Saving behaviors of private households under varying tariff structures, price levels and incentives - Experimental evidence

Franziska Harpenau, Katrin Marques Magalhaes, Nico Steffen and Lukas Wiewiorra

No 7, WIK Working Papers from WIK Wissenschaftliches Institut für Infrastruktur und Kommunikationsdienste GmbH, Bad Honnef

Abstract: More efficient and sustainable energy consumption behaviors are crucial to mitigate the adverse effects of climate change. This paper examines how dynamic personal pricing and externality cost incentives interact and affect energy conservation behaviors. We conduct an online lab experiment in which participants complete real-effort tasks under different cost schemes. Increasing personal costs that reduce individual bonuses, significantly decreases participants' energy usage, although it requires more effort in the form of additional time. However, emphasizing increases in externality costs, representing environmental damage through reduced donations, does not impact performance. This suggests that the introduction of such prosocial incentives matters more than their magnitude. While environmental attitudes predict baseline usage, they do not change marginal responses to cost changes. Our results provide novel evidence on the motivational nuances underlying energy conservation and have key implications for policies considering a combination of incentives.

Keywords: Energy consumption; Energy conservation; Behavioral; Environment (search for similar items in EconPapers)
JEL-codes: D91 Q41 Q56 (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-ene, nep-env, nep-exp and nep-reg
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:wikwps:280956

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